Microsoft Corporation will buy LinkedIn Corp for USD 26.2 billion in its biggest-ever deal announced on Mondau, giving the world’s biggest software provider access to online network of 433 million professionals.
Microsoft will pay USD 196 per share in an all-cash transaction, a 49.5 per cent premium to LinkedIn’s closing price on Friday.
While LinkedIn will retain its brand, culture and independence, Microsoft will speed up the monetisation by growing individual and organisation subscriptions as well as through targeted advertising.
Jeff Weiner will remain chief executive of LinkedIn and report to Microsoft CEO Satya Nadella. Reid Hoffman, chairman of LinkedIn’s board and the company’s controlling shareholder, said the deal has his full support.
Microsoft is looking at combining LinkedIn services to make workers more productive by revealing connections and data that might otherwise take additional steps to find. That could increase the value of Microsoft’s Office to customers.
In India, LinkedIn has about 650 employees and R&D operations in Bengaluru.
LinkedIn started out in the living room of co-founder Hoffman in 2002 and was officially launched on May 5 in 2003.
It has seen 19 per cent growth year-on-year to more than 433 million members worldwide while quarterly member page views rose 34 per cent to over 45 billion. Over 92 million users came from Asia and the Pacific region.
The companies see cost savings of about USD 150 million a year by 2018. LinkedIn will be required to pay a USD 725 million break-up fee if it backs out of the deal.
This is the biggest deal of Microsoft under India-born Nadella who was appointed chief executive in February 2014.
Since its first acquisition in 1987 of Forethought, Microsoft has expanded operations extensively through the inorganic route. It has made several acquisitions worth over one billion dollars.
In addition, Microsoft also reiterated its intention to complete its existing USD 40 billion share repurchase authorisation by December 31, 2016, the same timeframe as previously committed.
LinkedIn has more than 9,700 full-time employees and is headquartered in Mountain View, California. It has offices in 30 cities, including Bengaluru, Beijing, Chicago, Dubai, Dublin, Hong Kong and London.