Microsoft acquiring LinkedIn for $26.2 billion ($196 per share) in cash

Microsoft is acquiring LinkedIn for $26.2 billion ($196 per share) in cash – making it the tech giant’s biggest purchase ever.

The business-oriented social network LinkedIn, which was founded in 2002 and went public in 2011, currently boasts approximately 430 million members – placing it significantly ahead of its competitors Viadeo and XING – with 105 million unique visiting members per month.

The two companies said in a statement that once the transaction is complete LinkedIn will “retain its distinct brand, culture and independence.”

Microsoft_LinkedIn_Buyout

The deal is expected to be complete by the end of the year.

Jeff Weiner will remain CEO of LinkedIn, reporting to Satya Nadella, CEO of Microsoft.

“The LinkedIn team has grown a fantastic business centered on connecting the world’s professionals,” Nadella said. “Together we can accelerate the growth of LinkedIn, as well as Microsoft Office 365 and Dynamics as we seek to empower every person and organization on the planet.”

Why is Microsoft acquiring LinkedIn?

Mr Nadella told the Financial Times that Microsoft will be put in a position to “reinvent business processes and productvity” by having access to LinkedIn’s data and its 433m individual users, along with their professional connections. Nadella said that the professional profiles people have on LinkedIn could be ‘fed into other Microsoft services, from Word and PowerPoint to Skype.’

Meanwhile, Gartner analyst Brain Blau told the FT that the deal is “seemingly odd”. “There have been signs of slowing growth and engagement,” says Mr Blau. “They’ve [LinkedIn] been struggling.” He did note that LinkedIn is still “a great brand, and they’re top of what they do. They have the world’s best collection of people at work.”



“Just as we have changed the way the world connects to opportunity, this relationship with Microsoft, and the combination of their cloud and LinkedIn’s network, now gives us a chance to also change the way the world works,” Weiner said. “For the last 13 years, we’ve been uniquely positioned to connect professionals to make them more productive and successful, and I’m looking forward to leading our team through the next chapter of our story.”

Reid Hoffman, chairman of the board, co-founder and controlling shareholder of LinkedIn, commented: “Today is a re-founding moment for LinkedIn. I see incredible opportunity for our members and customers and look forward to supporting this new and combined business.

“I fully support this transaction and the Board’s decision to pursue it, and will vote my shares in accordance with their recommendation on it.”

Shares in LinkedIn surged as much as 49% following the news.

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