On June 13, Microsoft Corporation and LinkedIn Corporation announced that they have entered into a definitive agreement under which Microsoft will acquire LinkedIn for $196 per share in an all-cash transaction valued at $26.2 billion.
- LinkedIn will retain its distinct brand, culture and independence.
- Jeff Weiner will remain CEO of LinkedIn, reporting to Satya Nadella, CEO of Microsoft.
- Reid Hoffman, chairman of the board, co-founder and controlling shareholder of LinkedIn, and Weiner both fully support this transaction.
- The transaction has been unanimously approved by the Boards of Directors of both LinkedIn and Microsoft.
- The transaction is expected to close this calendar year, subject various approvals.
- Microsoft will finance the transaction primarily through the issuance of new indebtedness.
“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.”
“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.”
Why will this succeed?
Microsoft’s past acquisitions, like Nokia Skype Technologies and Yammer Inc., did not add intended value to the parent company. But this time, Microsoft and LinkedIn looks like they are a natural fit, and the deal may fare better than Microsoft’s past acquisitions.
- Real synergy between the companies and their products.
- The coming together of the professional cloud and the professional network.
- LinkedIn’s users are, arguably, Microsoft’s core demographic.
- LinkedIn also could supercharge Microsoft’s Customer Relationship Management (CRM) software.
If Mr. Nadella can re-energize an organization as big and legacy-bound as Microsoft, who is to say he can’t do the same for 13-year-old LinkedIn.
Video: Microsoft on YouTube
Sources & References: WSJ, Microsoft