Microsoft to Acquire LinkedIn for $26.2 Billion

Microsoft has entered the social networking market with its biggest ever acquisition of the professional social network, LinkedIn for 26.2 billion United States dollars.

Microsoft will pay $196 per share in an all-cash transaction, including LinkedIn’s net cash, is a 49.5 percent premium to LinkedIn’s closing price Friday.

LinkedIn “will retain its distinct brand, culture and independence”, with Jeff Weiner remaining as LinkedIn CEO, the companies, said.

The transaction has been approved by the Board of Directors of both companies, and is still subject to approval by LinkedIn’s shareholders, the satisfaction of certain regulatory approvals and other conditions. For Microsoft, the LinkedIn deal is a chance to reverse its mixed track record with acquisitions, including paying $9.4 billion for Nokia in 2014 and $6.3 billion for online advertising company aQuantive in 2007.

The companies say the partnership will help LinkedIn improve its offerings, including job listings and Recruiter, a hiring tool.

The deal reflects Microsoft’s new focus on business services and cloud computing, Nadella said in an email to staff. It requires a vibrant network that brings together a professional’s information in LinkedIn’s public network with the information in Office 365 and Dynamics. With over 433 million members globally, and 105 million unique visiting members a month, LinkedIn has often been called the world’s largest professional network.

Prior to the deal, the social media network had suffered an annual loss of $166 million and issued a profit warning for the first quarter of the financial year.

Mr Nadella said Microsoft had a history of buying businesses and integrating them into the group, ranging from Power Point to the Minecraft game, and Skype.

Meanwhile, LinkedIn CEO Weiner referred to the deal as a “re-founding moment for LinkedIn”. “His [Nadella’s] vision was to operate LinkedIn as a fully independent entity within Microsoft, a model used with great success by companies like YouTube, Instagram and WhatsApp”, he told staff.

For Microsoft, the deal is another step in its pursuit of relevance and a reimagining of its software products to compete with other cloud powerhouses such as Google and Amazon.