Microsoft and LinkedIn have announced they have entered into a definitive agreement under which Microsoft buys LinkedIn for $196 per share in an all-cash transaction valued at $26.2 billion, inclusive of LinkedIn’s net cash. LinkedIn will retain its distinct brand, culture and independence. Jeff Weiner will remain CEO of LinkedIn, reporting to Satya Nadella, CEO of Microsoft.
The decision is supported by Reid Hoffman, LinkedIn’s chairman, co-founder and controlling shareholder.
LinkedIn is the world’s largest professional network, with over 433 million members in more than 200 countries, growing at 19% year-on-year. Over the past year, the company has launched a new version of its mobile app that has led to increased member engagement; enhanced the LinkedIn newsfeed to deliver better business insights; acquired online learning platform called Lynda.com to enter a new market; and rolled out a new version of its Recruiter product to its enterprise customers.
Described as “the world’s leading professional cloud” merging with “the world’s leading professional network”, it’s the first major acquisition for Satya Nadella since he took over from Steve Ballmer as CEO of Microsoft. Both he and Weiner have emphasised the strategic benefits of the deal for both companies.
“The LinkedIn team has grown a fantastic business centered on connecting the world’s professionals,” Nadella said. “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.”
“Just as we have changed the way the world connects to opportunity, this relationship with Microsoft, and the combination of their cloud and LinkedIn’s network, now gives us a chance to also change the way the world works,” Weiner said. “For the last 13 years, we’ve been uniquely positioned to connect professionals to make them more productive and successful, and I’m looking forward to leading our team through the next chapter of our story.”
The transaction has been unanimously approved by the Boards of Directors of both LinkedIn and Microsoft. The deal is expected to close this calendar year and is subject to approval by LinkedIn’s shareholders, the satisfaction of certain regulatory approvals and other customary closing conditions.
“Today is a re-founding moment for LinkedIn. I see incredible opportunity for our members and customers and look forward to supporting this new and combined business,” said Hoffman. “I fully support this transaction and the Board’s decision to pursue it, and will vote my shares in accordance with their recommendation on it.”
Microsoft and LinkedIn will host a joint conference call with investors at 11:45 US Eastern Time (16:45 in Ireland).