Microsoft to buy LinkedIn in deal valued at $26.2 billion

Jeff Weiner will remain as CEO and report to Microsoft CEO Satya Nadella

Microsoft is said to purchase LinkedIn in a transaction valued at $26.2 billion. (Photograph: Robert Galbraith/Reuters)

Microsoft is said to purchase LinkedIn in a transaction valued at $26.2 billion. (Photograph: Robert Galbraith/Reuters)

 

Microsoft has bought LinkedIn for $26.2 billion, as the Seattle-based software company seeks to expand its reach into professional networking.

The deal is Microsoft’s biggest-ever acquisition, and follows a pattern of bold moves by chief executive Satya Nadella to reinvent the company that is known primarily as the maker of Windows.

The offer of $196 a share represents a 50 per cent premium to LinkedIn’s closing price on Friday and is inclusive of the professional networking website’s net cash.

LinkedIn’s shares have fallen 40 per cent over the past year, and plummeted when the company lowered its outlook for professional subscription services revenues.

Chief executive Jeff Weiner will remain CEO of LinkedIn, and founder Reid Hoffman will remain board chairman.

A slump in tech stocks this year could lead to further consolidation in the sector, analysts say. Twitter and Yahoo are also seen as possible acquisition targets.

The news sent LinkedIn’s shares up 50 per cent in pre-market trading. Microsoft shares fell 4 per cent.

In an email to staff, Mr Nadella said: “This deal brings together the world’s leading professional cloud with the world’s leading professional network . . . LinkedIn will retain its distinct brand and independence, as well as their culture which is very much aligned with ours.”

Mr Nadella added that any staff not already using the network should “join up now and start using and learning more.”

Benedict Evans, partner at Andreessen Horowitz, tweeted that the deal was part of Microsoft’s attempts to recreate “the connective tissue for enterprises”. However, he said LinkedIn would ‘take a lot of fixing’.

Mr Evans added that it helped that they could do this without the “media distraction” of shareholders.

– Copyright The Financial Times Limited 2016