Zoho Social Media Inc., a Japanese company, will buy Instagram for $3.5 billion, the Wall Street Journal reported Thursday.
The company plans to spin off Instagram, its mobile-focused social-media site, as part of the deal, which is expected to close in the fourth quarter, the Journal reported.
The acquisition also includes Snap Inc., which has been a major rival of Zoho.
In the deal announced in September, Zoho said it would spin off its social-news site, Twitter, to the same company as Instagram, and it will also acquire Snapchat Inc., its photo-sharing app.
Instagram’s growth has been driven by its ability to reach a larger audience of users, and the acquisition of Snap will allow the company to expand its reach and reach into the world of media.
Instagram has been on the rise since its acquisition by Facebook in 2014.
Its share price rose sharply last year, and this week the company was valued at $6.5 trillion.
The move comes as Snap’s market value is at its highest point since late 2016, according to data from Jefferies Group Inc. The Facebook acquisition was the first in a series of major tech deals, with the acquisition price in the millions of dollars.
The deal with Zoho is expected, according the Journal, to be completed in the third quarter.
“Instagram is a world-class platform with the capacity to drive the next wave of growth for our business and society,” CEO Kevin Systrom said in a statement.
Instagram is owned by Facebook Inc., while Zoho has been owned by Japanese conglomerate Sumitomo Corp. for more than 20 years.
Instagram grew at a rapid pace in 2017.
It had nearly 4 billion monthly active users by the end of the year, nearly double the 4.7 billion users that it had in the year before the deal.
Instagram surpassed the billion mark in the first half of this year.
Facebook and Instagram recently reached an agreement that allows them to share the revenue from Instagram ad revenue.
“We’re excited to see Instagram grow further, and are committed to doing what’s right for Instagram users, including improving product and service and reducing the burden on users,” said CEO Kevin Lynch in a post on Instagram’s blog.