Microsoft buys LinkedIn for $26 billion

Microsoft has announced it is set to buy the professional social network LinkedIn for an all-cash transaction valued at $26.2 billion (£18.5 billion), making it the biggest deal in the tech company’s history.

In a statement, Microsoft said LinkedIn would “retain its distinct brand, culture and independence”, and that Jeff Weiner would remain CEO of the company.

“The LinkedIn team has grown a fantastic business centered on connecting the world’s professionals,” Microsoft CEO Satya 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.”

The deal is supported by LinkedIn’s Weiner, as well as Reid Hoffman – the company’s co-founder and controlling shareholder. “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,” Weiner said.

“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.”

Microsoft will acquire LinkedIn to the tune of  $196 (£138) per share. The deal is expected to close by the end of this year, subject to approval from LinkedIn’s shareholders and regulatory approvals.

The deal dwarfs the $8.5 billion the company paid for Skype in 2011, as well as the $7.2 billion cost of Nokia’s phone business, which it acquired in 2013.

“Connecting the professional world”

In a leaked presentation assembled for the deal, one slide in particular gives an insight into the thinking behind the acquisition. Titled, “connecting the professional world”, two graphs show the respective nodes for LinkedIn and Microsoft. As partner at venture capitalist firm Andreessen Horowitz, Benedict Evans, points out, the connective tissue between the two sides looks to be cloud, mobile and AI.

LinkedIn’s shares have skyrocketed since the announcement, jumping 48% in pre-market trading. Wall Street Journal financial editor Dennis K Berman has however said that the deal is “not liberation. It is capitulation.”

Elsewhere, the LinkedIn jokes are coming.

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