Microsoft to Acquire LinkedIn

Microsoft is to buy LinkedIn Corp for $26.2bn in cash, a premium of just under 50 percent to its Friday closing share price. The firms say LinkedIn will retain its distinct brand, culture and independence.

The deal, which is subject to shareholder approval and regulatory permission from the EU, US, Canada and Brazil, has the approval of both boards and is expected to close this calendar year. It's Microsoft's biggest ever buy and offers it access to the enterprise social media leader's network of 433 million professionals. Microsoft CEO Satya Nadella says the buy 'brings together the world's leading professional cloud with the world's leading professional network', and in a letter to staff enthused: 'In essence, we can reinvent ways to make professionals more productive while at the same time reinventing selling, marketing and talent management business processes'.

Microsoft has around 1.2 billion users for its Office software, and Nadella, who took over in February 2014, says he has been 'thinking about this for a long time', as well as talking to LinkedIn Chairman Reid Hoffman and CEO Jeff Weiner, and sees massive potential for helping 'the professionals of the world get their work done'.

LinkedIn's share price has been something of a rollercoaster since it went public in 2011 at $45 a share - it peaked at $270 per share in 2015, but dropped after a weak forecast and slowing growth in ad revenue earlier this year, and sat at just below $131 on Friday. Analysts say the new owner will aim to accelerate LinkedIn's path to profitability by growing the number of individual and company subscriptions, and monetizing its ad targeting potential.

Founder Hoffman has apparently called joining with Microsoft a 're-founding' moment and an opportunity to reach the mission the company set out on thirteen years ago. Weiner, who will remain CEO of LinkedIn following the buy and will report to Nadella, told reporters quoted by Reuters that LinkedIn 'would remain its own entity in the way that YouTube is relatively independent from parent Alphabet... or Instagram from parent Facebook'. While LinkedIn will become part of Microsoft's productivity and business processes unit, Nadella says Weiner will decide 'what makes sense to integrate and what does not'.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.