Microsoft agreed to pay $196 per share, 50 percent more than the closing price of LinkedIn shares on Friday.
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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.
LinkedIn’s CEO Jeff Weiner will remain in his current role and report to Microsoft’s Nadella.
“This deal brings together the world’s leading professional cloud with the world’s leading professional network”, Microsoft chief executive Satya Nadella said in a statement. Office 365 is a subscription-based version of Microsoft’s traditional office-software suite; Dynamics is a software tool that helps companies track sales prospects and other “customer relationships”. The acquisition is expected to become accretive to Microsoft’s profits by fiscal 2019 or less than two years after the deal is closed.
Despite the rich premium paid by Microsoft, LinkedIn is selling for well below its peak of more than $270 per share in 2015, but a weak forecast earlier this year sent its shares tumbling amid slowing online ad revenue.
He encouraged Microsoft staff to sign up to LinkedIn and get to know the service better, if they weren’t already members. Microsoft shares, meanwhile, have fallen 4 percent.
Despite this acquisition being the biggest Microsoft has ever made, the firm has stated that it intends to make sure the professional social network retains its “distinct brand, culture and independence”. “We’ve always considered two potential acquirers for LinkedIn – Salesforce or Microsoft”, he said in a note to investors Monday. This is inclusive of the professional networking site’s net cash. “It’s clear to me that the LinkedIn team has grown a fantastic business and an impressive network of more than 433 million professionals”. I have been learning about LinkedIn for some time while also reflecting on how networks can truly differentiate cloud services.
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He continued: “Microsoft has struggled both to diversify and to integrate major acquisitions”. The software giant’s biggest purchases four years ago under Steve Ballmer, previous CEO of Microsoft are Nokia Corp.’s mobile phone business for $9.5 billion, Skype for $8.5 billion and Yammer for $ 1.2 billion had no great business as expected by the company.
