Microsoft, Redmond, Wash., announced today that it has acquired Mountain View, California-based LinkedIn for $196 per share (a 49 percent increase since Friday) in an all-cash transaction worth $26.2 billion. According to a statement from Microsoft, LinkedIn will retain its brand, culture and independence. Jeff Weiner, CEO of LinkedIn, will remain in his position and will report to Satya Nadella, CEO of Microsoft.
For scale, that’s more than 89 countries’ GDPs, according to the International Monetary Fund’s 2015 list. LinkedIn lost $164 million in 2016, and hasn’t been profitably on an annual basis for three years, according to The Seattle Times .Also, this is the largest acquisition in Microsoft’s history.
Following the acquisition, LinkedIn shares increased 47 percent to $192.27 as of 2 p.m. today.
“The LinkedIn team has grown a fantastic business centered on connecting the world’s professionals,” Nadella said in the statement. “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.”
https://www.youtube.com/watch?v=-89PWn0QaaY
Microsoft and LinkedIn hosted a joint conference call with investors this morning at 8:45 a.m. PDT/11:45 a.m. EDT to discuss the transaction.
Weiner released an email he sent to LinkedIn employees this morning. In it, he explained his motives to agree to the deal, and what people can expect going forward:
When Satya first proposed the idea of acquiring LinkedIn, he said it was absolutely essential that we had alignment on two things: purpose and structure. On the former, it didn’t take long before the two of us realized we had virtually identical mission statements. For LinkedIn, it was to connect the world’s professionals to make them more productive and successful, and for Microsoft it was to empower every individual and organization in the world to achieve more. Essentially, we’re both trying to do the same thing, but coming at it from two different places: For LinkedIn, it’s the professional network, and for Microsoft, the professional cloud.
He added that the acquisition will allow LinkedIn to expand its reach by being connected to Microsoft programs, like Outlook, Calendar, Office, Skype and more. It also will integrate the Lynda.com/LinkedIn learning platform in Office, improving social selling by combining Sales Navigator and Dynamics, and providing more subscription capabilities to freelancers who use Microsoft’s apps for work.
Microsoft will pay for the acquisition primarily through new debts. Morgan Stanley is acting as the exclusive financial advisor to Microsoft, and expects the deal to close this calendar year.
