Microsoft announced that it would be acquiring LinkedIn
in an all-cash deal of $26.2 billion, giving its “social” business a
major boost. Microsoft says LinkedIn will keep its own brand and
independence. Existing CEO Jeff Weiner will remain and report to Satya Nadella.
As per the deal terms, Microsoft is paying $196 per share. A significant 50% premium from the current stock price of $131 per share.
"The LinkedIn team has grown a fantastic business centered on connecting the world’s professionals.
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, "Nadella said.
In a statement to LinkedIn employees, Weiner said "little is expected to change" and employees will have the same titles and managers.
"The one exception: For those members of the team whose jobs are entirely focused on maintaining LinkedIn's status as a publicly traded company, we'll be helping you find your next play. In terms of everything else, it should be business as usual. We have the same mission and vision; we have the same culture and values; and I'm still the CEO of LinkedIn," Weiner said.Microsoft is planning to close its acquisition later this year, and the deal has been unanimously approved by the boards of directors of both companies.
Microsoft will finance the transaction primarily through the issuance of new indebtedness. Upon closing, Microsoft expects LinkedIn’s financials to be reported as part of Microsoft’s Productivity and Business Processes segment.
In addition, Microsoft also reiterated its intention to complete its
existing $ 40 billion share repurchase authorization by December 31,
2016, the same time frame as committed. LinkedIn has more than 9,700
full-time employees and is headquartered in Mountain View, California.
It has offices in 30 cities, including Bengaluru, Beijing, Chicago,
Dubai, Dublin, Hong Kong and London.
LinkedIn currently claims to have 433 million members, up 19% year-on-year. Of this, 105 million unique members are visiting every month. It claims to have 7 million active job listings as of now, up 101% year-on-year.
Microsoft isn't saying exactly what it will use its LinkedIn
acquisition for. It's easy to imagine it being used as a key way to
boost the company's social networking presence. Microsoft did invest in
Facebook in the relatively early stages. Since then the company has
struggled to break into enterprise social networks. Microsoft spent $1.2 billion on Yammer back nearly four years ago, but businesses haven't flocked to the tool as much as Microsoft had hoped.
outsiders will be watching patiently to see exactly how well Microsoft
integrates the social network into everything the company provides for
businesses. Microsoft’s enterprise-centric intentions are clear, and it
has gone on the offense today to prove it.