Twitter (TWTR) announced today that it has entered into a definitive agreement to be acquired by an entity wholly owned by Tesla CEO Elon Musk, for US$54.20 per share in cash in a transaction valued at approximately US$44 billion. Upon completion of the transaction, Twitter will become a privately held company.

The purchase price represents a 38% premium to Twitter's closing stock price on April 1, 2022, which was the last trading day before Musk disclosed his approximately 9% stake in Twitter.

Bret Taylor, Twitter's Independent Board Chair, said, "The Twitter Board conducted a thoughtful and comprehensive process to assess Elon's proposal with a deliberate focus on value, certainty, and financing. The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter's stockholders."

Parag Agrawal, Twitter's CEO, said, "Twitter has a purpose and relevance that impacts the entire world. Deeply proud of our teams and inspired by the work that has never been more important."

"Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated," said Musk.

"I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it."

The transaction, which has been unanimously approved by the Twitter Board of Directors, is expected to close in 2022, subject to the approval of Twitter stockholders, the receipt of applicable regulatory approvals and the satisfaction of other customary closing conditions.

Musk has secured US$25.5 billion of fully committed debt and margin loan financing and is providing an approximately US$21 billion equity commitment. There are no financing conditions to the closing of the transaction. 

Morningstar senior equity analyst Ali Mogharabi had previously suggested a 50/50 likelihood that a deal would go through, though he argued that significant change would follow at the top of the company, regardless of whether an agreement was reached.