Microsoft, the US software giant, is buying LinkedIn for $26.2bn in cash.
The offer of $196 a share represents a 50 per cent premium to LinkedIn’s closing price on Friday and is inclusive of the professional networking website’s net cash.
LinkedIn’s share price immediately rocketed to that level, while Microsoft – which said it was planning to finance the takeover through new debt issuance – saw its shares drop 4 per cent.
In a statement, Microsoft said LinkedIn will retain its brand, culture and independence. Jeff Weiner will also stay on as chief executive of the company.
In an email to staff, Satya Nadella, Microsoft’s CEO, said:
This deal brings together the world’s leading professional cloud with the world’s leading professional network… LinkedIn will retain its distinct brand and independence, as well as their culture which is very much aligned with ours.
He added that any staff not already using the network should “join up now and start using and learning more.”
For LinkedIn, the deal comes as the company struggles with slowing growth. The
stock suffered a 43 per cent one day drop in February – its biggest on record – after the Mountain View, California-based company warned about slowing growth at the so-called “talent solutions business”, which sells subscriptions to companies hunting for potential hires.
Reid Hoffman, chairman and controlling shareholder of LinkedIn said:
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.
It is not immediately clear how LinkedIn will fit into Microsoft’s strategy. Under Mr Nadella, the company has pulled back on its ambition to crack the phone hardware business and has been investing heavily in its cloud services amid the decline in its traditional on-premise server business.
Originally posted 2016-06-13 13:26:32.