Microsoft to acquire LinkedIn in all-cash transaction for USD 26.2 billion

Technology giant Microsoft today said it will acquire professional networking platform LinkedIn in an all-cash transaction valued at USD 26.2 billion.

Microsoft will acquire LinkedIn for USD 196 per share in an all-cash deal valued at USD 26.2 billion, inclusive of LinkedIn’s net cash, Microsoft said in a statement. LinkedIn will retain its distinct brand, culture and independence, it added.

The transaction is expected to close this calendar year. “The LinkedIn team has grown a fantastic business centred on connecting the world’s professionals. Together, we can accelerate the growth of LinkedIn as well as Microsoft Office 365 and Dynamics as we seek to empower every person and organisation on the planet,” Microsoft chief Satya Nadella said.

Jeff Weiner will remain CEO of LinkedIn, reporting to Nadella. Reid Hoffman, Chairman of the board, co-founder and controlling shareholder of LinkedIn, and Weiner both fully support this transaction, the statement said. 

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. LinkedIn 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. In the first quarter of 2016, LinkedIn’s revenue increased 35 per cent y-o-y to reach USD 861 million. It had forecast its revenue for the full year 2016 to be in the range of USD 3.65-3.7 billion.

“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.

Microsoft will finance the transaction primarily through the issuance of new indebtedness. Upon closing, Microsoft expects LinkedIn’s financials to be reported as part of Microsoft’s Productivity and Business Processes segment.

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.          
Morgan Stanley acted as exclusive financial advisor to Microsoft and Simpson Thacher & Bartlett LLP was the legal advisor to Microsoft.

Qatalyst Partners and Allen & Company LLC are acting as financial advisors to LinkedIn while Wilson Sonsini Goodrich and Rosati, Professional Corporation, is acting as legal advisor.