How Amazon Successfully Beating Google and other Tech Giants to Buy Twitch

Justin Kan, the CEO of Twitch announced that he was contacted by few tech giants for an acquisition proposal

First served was Google, with the negotiation flow of:

1. $ 150 M in considerations and $ 25 M in retention = $ 175 M
2. $ 225 M in considerations and $ 50 M in retention = $ 275 M
3. $ 300 M in considerations and $ 75 M in retention = $ 375M
4. $ 500 M in considerations and $ 100 M in retention = $ 600 M
5. $ 625 M in considerations and $ 125 M in retention = $ 750 M
6. $ 850 M in considerations and $ 150 M in retention = $ 1 B

Considerations: part of the deals that go to cap table, that means everybody who is an owner of the company

Retention: part of the deals that goes to basically everyone who’s going to work at after acquisition

So what got the offer canceled? After loads of documentations and close the deal, they will go to the govt to verify for an anti-monopoly, but it took a long time (even Waze took a year when acquired by Google).

If both companies close the deal, then the control will be given to the acquirer, but Twitch's original members haven’t got paid yet until the govt approves. So between the duration, they negotiated:

1. Google must pay $ 50 M immediately after the deal signed to ensure Twitch continuess operating.
2. If the deal doesn’t get close because the govt vetoes it, Google got to pay $ 200 M as a guarantee of no-risk clarification (questionable at the start, being the king of streamer as Youtube already is).

But Google disapproves of the idea and they turn away from the deal.

Knowing this, it is no wonder the big company wants to take the chance or blocking others. Mark Zuckerberg actually phoned to offer a $ 50 M investment and encourage Twitch to just keep going.

The next dog that approached was Yahoo, they offer $ 1.25 B in considerations and $ 250 M in retention. but on the last day of the agreement, Yahoo CEO Marissa Meyer share her vision on Twitch to expand to another industry, but it is quite disconnected from Twitch's identity. Yahoo eventually walks away from the deal.

Months of no contact, Qatalyst reactivated another buyer, Amazon, which offer $ 1.2 B in considerations and $ 200 M in retention. But they have change of heart to do the final deal at $ 970 M, Twitch and Amazon close the deal.

Credits: Justin Kan’s official Youtube contents