Microsoft on Monday agreed to buy LinkedIn for $26.2 billion in its biggest ever deal combining the software giant’s fast-growing cloud services business with an online network of 433 million professionals. The offer of $196 per share represents a premium of 49.5% to LinkedIn’s Friday closing price.
“Today is a re-founding moment for LinkedIn,” Reid Hoffman, chairman of LinkedIn’s board, said in a statement. Jeff Weiner will remain chief executive of LinkedIn, reporting to Microsoft CEO Satya Nadella.
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.
Microsoft chief Satya Nadella today said new opportunities for monetisation will be created once integration with LinkedIn, its largest acquisition till date, is completed.The USD 26.2-billion deal, which is the largest in the history of the Redmond-based firm, will help “reinvent productivity and business processes”, Nadella said in an e-mail to employees.
We take a look at the latest developments in one of this year’s biggest M&A deals:
Microsoft-LinkedIn deal Live Updates:
10.00 PM: Microsoft CEO Nadella said, LinkedIn’s “news feed” _ which provides articles and updates from your contacts on the network _ could highlight information that’s relevant to a project you might be working on using Microsoft’s Office 365 software. LinkedIn users might see changes in the first year after the deal is closed, Nadella said.
9.50 PM: Satya Nadella told The Associated Press that Microsoft’s digital assistant Cortana could mine LinkedIn for helpful data. “Cortana can wake up before you go into a meeting and inform you about all the people you are meeting for the first time and the connections you have with them,” he said.
9.40 PM: LinkedIn shares soared 48 percent and Microsoft fell 4 percent after the software giant agreed to buy the professional networking services firm for $26.2 billion.
9.20 PM: Microsoft chief Satya Nadella today said new opportunities for monetisation will be created once integration with LinkedIn, its largest acquisition till date, is completed.
8.45 PM: Satya Nadella: LinkedIn gives us a great opportunity for growth.
8.10 PM: Microsoft drags all three indexes on LinkedIn takeover. Indexes down: Dow 0.3 pct, S&P 0.28 pct, Nasdaq 0.45 pct.
7:40 PM: Wall Street opened lower for the third straight trading day, pulled down by Microsoft, ahead of the Federal Reserve’s policy meeting starting Tuesday. Microsoft was the biggest drag on all three major indexes after the software company agreed to buy LinkedIn for $26.2 billion. Microsoft stock fell 4.5 percent to $49.18 while LinkedIn jumped 47 percent to $193.13.
7:38 PM: Weiner’s email to LinkedIn staff – Today’s announcement, that LinkedIn will be combining forces with Microsoft, marks the next step in our journey together, the next stepping stone toward realizing our mission and vision, and in remaining CEO of the company, the next chapter in the greatest professional experience of my life.
7:30 PM: Weiner’s email to LinkedIn staff – Creating economic opportunity will be the defining issue of our time. That’s why I’m here and why I can’t imagine doing any other job. Simply put, what we do matters, and matters more than ever.
7:25 PM: Weiner on why LinkedIn chose Microsoft – The Microsoft that has evolved under Satya’s leadership is a more agile, innovative, open and purpose-driven company. It was that latter point that first had me thinking we could make this work, but it was his thoughts on how we’d do it that got me truly excited about the prospect. Read the full email here
6:52 PM: In India, LinkedIn has about 650 employees and R&D operations in Bengaluru.
6:50 PM: LinkedIn will retain its distinct brand, culture and independence
6:45 PM: Nadella: 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.
6:40 PM: Jeff Weiner will remain CEO of LinkedIn, reporting to Nadella
6:35 PM: Weiner: 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.
6:30 PM: Microsoft said it would issue new debt to fund the deal. After the deal, LinkedIn will become part of Microsoft’s productivity and business processes unit. Microsoft also reiterated its intention to complete its existing USD 40 billion share repurchase authorisation by December 31, 2016, the same timeframe as
6:20 PM: LinkedIn shares were up 63% & Microsoft shares were down 4.3% in premarket trading
6:10 PM: Microsoft and LinkedIn will host a joint conference call with investors on June 13, 2016, at 8:45 a.m. Pacific Time/11:45 a.m. Eastern Time to discuss this transaction. The conference call will be hosted by Nadella and Weiner, as well as Microsoft Chief Financial Officer Amy Hood and Microsoft President and Chief Legal Officer Brad Smith.
6:09 PM: Morgan Stanley is acting as exclusive financial advisor to Microsoft, and Simpson Thacher & Bartlett LLP is acting as legal advisor to Microsoft. Qatalyst Partners and Allen & Company LLC are acting as financial advisors to LinkedIn, while Wilson Sonsini Goodrich & Rosati, Professional Corporation, is acting as legal advisor.
LinkedIn started out in the living room of co-founder Hoffman in 2002 and was officially launched on May 5 in 2003. 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.
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 $3.65-3.7 billion.