The boards of both companies unanimously approved the deal which is expected to wrap up later this year. It will report LinkedIn’s financials as part of Microsoft’s Productivity and Business Processes segment, which includes the Office 365 suite of cloud-based productivity tools and the Dynamics platforms for enterprise resource planning and customer relationship management (CRM).
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The business world woke up Monday morning to the news that LinkedIn is being acquired by Microsoft for sizable $26 billion.
It has also reported a 19% growth in members over the past year, and now has 433 million worldwide.
The acquisition will be the largest in Microsoft’s history, and is more than three times the $8.5 billion the company paid for Skype Technologies in 2011. Coming together, we can accelerate the growth of Office 365 as well as the social network and empower every single professional and the organization on the planet.
The all-cash transaction will see LinkedIn retain its own brand and independence with current CEO Jeff Weiner remaining in his position and reporting directly to Microsoft CEO Satya Nadella. The entire transaction is expected to close before the end of this calendar year.
“In essence, what I’ve asked Jeff to do is manage LinkedIn with key performance metrics that accrue to our overall success”, Nadella said.
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.
LinkedIn shares soared 49% before the stock market opened on Monday.
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.
Microsoft CEO Satya Nadella said LinkedIn had built a “fantastic business centred on connecting the world’s professionals”.
Over 92 million users came from Asia and the Pacific region. During the same period there was more than 100% growth in active job listings – which exceeded seven million.
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Investors on Wall Street took flight after it forecast full-year revenues to hit between 3.6 and 3.65 billion U.S. dollars (£2.5 billion and £2.6 billion), falling short of analyst predictions of around 3.91 billion USA dollars (£2.8 billion).
