Microsoft said it would buy LinkedIn in a deal valued at US$26.2 billion, giving the world’s biggest software provider access to a virtual Rolodex of connected business professionals.
Microsoft will pay $196 per share in an all-cash transaction, including LinkedIn’s net cash, which is a 49.5 per cent premium to LinkedIn’s closing price Friday.
LinkedIn will retain its brand, culture and independence and Jeff Weiner will remain as chief executive, Microsoft said in a statement yesterday.
The deal is the largest under the tenure of Satya Nadella, Microsoft chief executive, who has been reshaping the company since taking over in 2014, seeking to appeal more to business customers with cloud-based services and productivity tools.
LinkedIn is not an obvious fit in the continuing restructuring, but gives Microsoft the biggest global social network for professional that is used by job seekers, recruiters and human resources teams.
In a statement, Mr Nadella said the acquisition could drive growth for LinkedIn as well as Microsoft’s Office 365 and Dynamics services.
“We are in pursuit of a common mission centred on empowering people and organisations,” he said.
Microsoft said it would finance the deal mostly by issuing new debt and forecasts $150 million of cost synergies annually by 2018.
Mr Weiner said: “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”.
He said the deal “is key to our bold ambition to reinvent productivity and business processes. Think about it: how people find jobs, build skills, sell, market and get work done and ultimately find success requires a connected professional world.”
LinkedIn, which calls itself “the world’s largest and most valuable professional network”, has been seeking to expand its offerings with more messaging, mobile applications and revamped its “newsfeed” to help boost engagement.
In the past quarter, LinkedIn reported a loss of $46 million and a $166m loss for last year.
The two companies said they had reached a “definitive” agreement that would close later this year, with the support of Reid Hoffman, LinkedIn’s chairman and controlling shareholder.
As part of the agreement, LinkedIn may not solicit competing proposals or participate in any discussions or negotiations regarding alternative deals.
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