Date:14/06/16
Microsoft is scooping up LinkedIn for $26.2 billion, the companies said on Monday, in the tech giant’s biggest acquisition yet.
Microsoft will pay $196 per share in cash for the professional social network, representing a 50% premium over LinkedIn’s last closing price. Shares of LinkedIn surged 48% to $194.51 in pre-market trading on Monday, while shares of Microsoft fell 3%.
LinkedIn’s CEO Jeff Weiner will remain in his current role and report to Microsoft’s Nadella. Weiner and LinkedIn’s billionaire cofounder Reid Hoffman, who is the company’s controlling shareholder, stated they are both in favor of the acquisition.
“Today is a re-founding moment for LinkedIn,” said Hoffman in prepared remarks. Weiner added: “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.”
In a presentation to investors released on Monday morning, Microsoft noted a shared goal of “empowering people and organizations” and touted LinkedIn’s growing user base, engagement and revenue. LinkedIn currently has 433 million members (up 19% from a year ago) across 200 countries and territories.
Microsoft also described an opportunity to equip professionals with the tools they need to be more productive, in part through Microsoft Office 365 and Dynamics. It will also seek to boost LinkedIn’s profits through targeted advertising and more individual and organization subscriptions.
“The LinkedIn team has grown a fantastic business centered on connecting the world’s professionals,” said Nadella. “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 took the top job at Microsoft in 2014 and has now orchestrated the biggest acquisition in its history, outdoing its $8.5 billion purchase of Skype in 2011 and its $7.6 billion acquisition of Nokia in 2013. Nadella’s first major purchase as CEO was spending $2.5 billion on Minecraft-maker Mojang.
Under Microsoft, LinkedIn will continue to retain its “distinct brand, culture and independence.” The acquisition is expected to become accretive to Microsoft’s profits by fiscal 2019 or less than two years after the deal is closed.
The transaction has been unanimously approved by both boards of directors and is expected to close before the end of the year. It is still subject to approval by LinkedIn’s shareholders and other regulatory approvals and closing conditions.
Microsoft will finance the purchase primarily through new debt, but reiterated that it still intends to finish buying back $40 billion in its stock by the end of this year under its current authorization.
The acquisition has already added substantially to the fortune of cofounder Reid Hoffman, whose net worth rose by $894 million to $3.8 billion on Monday, thanks to the surge in LinkedIn’s stock price.
Microsoft to buy LinkedIn for $26.2 billion in cash
Microsoft is scooping up LinkedIn for $26.2 billion, the companies said on Monday, in the tech giant’s biggest acquisition yet.Microsoft will pay $196 per share in cash for the professional social network, representing a 50% premium over LinkedIn’s last closing price. Shares of LinkedIn surged 48% to $194.51 in pre-market trading on Monday, while shares of Microsoft fell 3%.
LinkedIn’s CEO Jeff Weiner will remain in his current role and report to Microsoft’s Nadella. Weiner and LinkedIn’s billionaire cofounder Reid Hoffman, who is the company’s controlling shareholder, stated they are both in favor of the acquisition.
“Today is a re-founding moment for LinkedIn,” said Hoffman in prepared remarks. Weiner added: “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.”
In a presentation to investors released on Monday morning, Microsoft noted a shared goal of “empowering people and organizations” and touted LinkedIn’s growing user base, engagement and revenue. LinkedIn currently has 433 million members (up 19% from a year ago) across 200 countries and territories.
Microsoft also described an opportunity to equip professionals with the tools they need to be more productive, in part through Microsoft Office 365 and Dynamics. It will also seek to boost LinkedIn’s profits through targeted advertising and more individual and organization subscriptions.
“The LinkedIn team has grown a fantastic business centered on connecting the world’s professionals,” said Nadella. “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 took the top job at Microsoft in 2014 and has now orchestrated the biggest acquisition in its history, outdoing its $8.5 billion purchase of Skype in 2011 and its $7.6 billion acquisition of Nokia in 2013. Nadella’s first major purchase as CEO was spending $2.5 billion on Minecraft-maker Mojang.
Under Microsoft, LinkedIn will continue to retain its “distinct brand, culture and independence.” The acquisition is expected to become accretive to Microsoft’s profits by fiscal 2019 or less than two years after the deal is closed.
The transaction has been unanimously approved by both boards of directors and is expected to close before the end of the year. It is still subject to approval by LinkedIn’s shareholders and other regulatory approvals and closing conditions.
Microsoft will finance the purchase primarily through new debt, but reiterated that it still intends to finish buying back $40 billion in its stock by the end of this year under its current authorization.
The acquisition has already added substantially to the fortune of cofounder Reid Hoffman, whose net worth rose by $894 million to $3.8 billion on Monday, thanks to the surge in LinkedIn’s stock price.
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