Microsoft plans to acquire LinkedIn for $US26.2 billion

Date: June 13, 2016

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Anna Patty

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Microsoft buys LinkedIn for $26.2 billion

LinkedIn couldn't say no to a $26.2 billion takeover offer from Microsoft, the largest deal in the tech giant's history.

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Microsoft plans to acquire LinkedIn for $US26.2 billion ($35 billion), inclusive of LinkedIn's net cash.

A statement from both companies said the transaction has been approved by the boards of directors of both LinkedIn and Microsoft. Microsoft has agreed to acquire LinkedIn for $196 per share in cash.

The deal is expected to close this calendar year, but is subject to approval by LinkedIn's shareholders, regulatory approvals and other conditions.

Australian, NZ and South East Asia CEO LinkedIn CEO Cliff Rosenberg. Photo: Dominic Lorrimer

LinkedIn said it will retain its distinct brand and Jeff Weiner will remain its chief executive officer, reporting to Microsoft chief Satya Nadella.

In a statement issued by the companies, Reid Hoffman, chairman of the board, co-founder and controlling shareholder of LinkedIn, and Weiner said they both supported the transaction which is expected to be finalised this year.

The statement said LinkedIn is the world's largest professional network and has recently launched a new version of its mobile app that has led to increased member engagement among other innovations.

Mr Nadella said 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."

Mr Weiner said the relationship with Microsoft provided a chance "to change the way the world works".

"For the last 13 years, we've been uniquely positioned to connect professionals to make them more productive and successful, and I'm looking forward to leading our team through the next chapter of our story.

Mr Hoffman said he fully supports the deal "and will vote my shares in accordance with their recommendation on it".

36 comments so far

Oh dear. As a regular user of LinkedIn, this doesn't sound like a good outcome to me.
Will everyone suddenly have 'Windows' and 'Office365' embedded in their 'skills'?? (joke).
I don't think Microsoft transformed Skype into anything special beyond what it already was when they bought that - so I'm not sure I see any benefit to the product that is LinkedIn.

Commenter

The Donk

Location

Sydney

Date and time

June 14, 2016, 12:33AM
- Spot on Donk,
  With all due respect to their past successes, I have no idea what microsoft are playing at these days. Not sure if they do either.
  They wanted to get into the VOIP business so massively overpaid for skype. Effective competitors shot up all over the place and I feel like it's drifting away.
  The got into the smartphone sector and bought nokia, only to flog it off a short time later at a loss.
  Windows 10 is painful...! Seem's to have become a 'big data' gathering tool for microsoft and tries to force everyone over the bing (which is ordinary) and muck around with preferences with every update it does.
  Now they're scooping up linkedin. No doubt that they've made an offer to linkedin that was a no-brainer (read - they're about to overpay for it). I fear for what will become of it, but obviously some form of social media is in their sites, even though social media is failing to realise its expected returns. PS - new studies are showing that are spending big and gaining little from social media commercially.
  Meanwhile, being from the IT sector, I've never seen so many technicians and specialists required to keep windows-based servers running and happy. Meanwhile, their open-source rivals require little manpower and effort to maintain and even upgrade.
  In MBA degrees, which I've never done, they often tell students to stick to the core of their business. This is because the bankruptcy filing cabinet is full of companies that were successful at food distribution and unraveled when they ventured into race horse breeding.
  An interesting 10 years ahead for both microsoft and apple. Perhaps their days in the sun are behind them....
  
  Commenter
  
  Max
  
  Location
  
  Melb
  
  Date and time
  
  June 14, 2016, 9:51AM
- The Donk
  MS is just trying to keep up with Facebook.
  You will now be one of a U.S. Corporations global citizens ........ with all your friends, business associates, spending habits and anything else you have put into Linkedin at MSs complete disposal.
  
  Commenter
  
  A Green
  
  Location
  
  Australia
  
  Date and time
  
  June 14, 2016, 10:15AM
Again Microsoft ? How is it going with creating new products and services using all that expertise from Nokia?

Commenter

Oops

Location

Barwon Heads

Date and time

June 14, 2016, 2:21AM
From an investor's point of view:
(1) The MSFT deal lifted LNKD by 46.8% from a close of $131.09 last Friday to probably $192.41 (40 minutes before close). The MSFT deal values LNKD at $196.
(2) I bought in at $97 (AUD 94.10) on 23 Mar 2012, and the MSFT buy price is $196 (AUD 265), so I'm up 182% in 4 years.
(3) However LNKD peaked at $270.76 on 26 Feb 2015, so a price of $196 is down a long way over more than 5 quarters.
I guess I'm glad to be out of LNKD given where it may have gone had MSFT not bought it.
How's Facebook? Doing fine - currently $114.63 (AUD155.14). Its record close was $120.49 on 10 May 2016, so it's less than 5% below its peak. I bought into FB at $20.75 on 13 Sep 2012 (AUD 19.987) when FB was at a low because people thought Twitter (TWTR) was likely be the favourite social media product. So I'm up 676% on that deal, whereas TWTR is down to a low of $14.73.
At that price TWTR is small change for someone else wanting to grab TWTR's users.
So there's a shakeout going on with social media stocks at present.

Commenter

c'est moi

Date and time

June 14, 2016, 5:36AM
- Update: LNKD closed at $192.21 (up 46.64%). That sounds great, but if you'd bought into LNKD at the beginning of this horrible year you'd be down 14.6%. So, yes folks, I'm glad of MSFT's takeover.
  As for MSFT, they are down 2.64% because of the scale of the purchase, and what MSFT is going to have to do to get the cash to pay for it.
  
  Commenter
  
  c'est moi
  
  Date and time
  
  June 14, 2016, 6:29AM
- Investors view or brag time?
  Nice job by the way though.
  
  Commenter
  
  Harry
  
  Location
  
  Newcastle
  
  Date and time
  
  June 14, 2016, 7:34AM
- Hi @Harry
  No, I wouldn't call it brag time ... the last 18 months have been nothing to brag about.
  I also invest in (inter alia) Apple, and there's an article today likening Apple's lost value to that of Enron.
  So I talk more about the odd success, rather than the whole portfolio (which is underperforming the S&P500, DJIA and NASDAQ indices so far this year, but outperforming them on a longer-term basis. That's the thing about betas huh?
  
  Commenter
  
  c'est moi
  
  Date and time
  
  June 14, 2016, 8:30AM
- Not bad - 182% in nearly four years. I got 6 - 1 at Canterbury last week.
  
  Commenter
  
  L
  
  Location
  
  Melbourne
  
  Date and time
  
  June 14, 2016, 9:23AM
- so whats your next venture? im interested i what you have to say
  
  Commenter
  
  skeptic
  
  Location
  
  perth
  
  Date and time
  
  June 14, 2016, 9:44AM

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