Technology giant Microsoft announced on 13th June that it would buy the largest professional social media website – LinkedIn for $196/share totaling up to $26.2 billion. Microsoft will have to pay a $725 million termination fee if the deal is to fail. The deal is set to become accretive in 2019. Microsoft restated its intention to complete its existing $40 billion share repurchase authorization by Dec. 31, 2016.
LinkedIn was started in 2002 and is now the largest professional social network, with over 100 million active monthly users and over 430 million accounts. Microsoft CEO Satya Nadella proclaimed the merging is being done to improve both companies by integrating LinkedIn’s content and network with Microsoft’s cloud computing and productivity tools. CEO Satya Nadella said in the blog post. “The LinkedIn team has grown a fantastic business centered 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 organization on the planet.”
LinkedIn’s shares had been in a decline, with a reported 43% fall in February. They were struggling by themselves with poor projections for the year and now Microsoft will be paying a 50% premium on the company’s previous share of $131.
LinkedIn’s CEO Jeff Weiner said “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,”
Microsoft’s shares were down by 3.6% in premarket trading while LinkedIn’s shares raised high up following the merging announcement.
It is reported that Jeff Weiner will remain the CEO of LinkedIn and will report to Satya Nadella.
For More Information Read Microsoft Acquires Linkedin