Microsoft to Acquire LinkedIn in $26 Billion All-Cash Deal

Microsoft is acquiring LinkedIn in an all-cash transaction valued at $26.2 billion that is expected to close this calendar year. The details of the definitive agreement for purchase were shared by Microsoft in an announcement posted on the Microsoft News Center.

According to Mergermarket, a media company focused on the M&A sector, the acquisition is the third highest valued deal targeting the U.S. tech sector, following Hewlett-Packard’s $33.8 billion spin-off of its enterprise group, and Singapore-based Avago Technology’s $33.7 billion acquisition of Broadcom, both of which were announced in 2015.

Microsoft said that LinkedIn “will retain its distinct brand, culture and independence.” Jeff Weiner will continue as CEO of LinkedIn, reporting to Satya Nadella, CEO of Microsoft. Key executives, including Reid Hoffman, chairman of the board, co-founder and controlling shareholder of LinkedIn, and Weiner are in support of the transaction, the announcement said.

Citing LinkedIn’s launch of a new version of its mobile app supporting more member engagement; improvements to the LinkedIn newsfeed to deliver better business insights; acquisition of the online learning platform,; and a new version of its Recruiter product, Microsoft said LinkedIn has made moves that have resulted in improved member engagement and financial results.

Microsoft said LinkedIn has achieved 19% growth year over year (YOY) to more than 433 million members; 9% growth YOY to more than 105 million unique visiting members per month; 49% growth YOY to 60% mobile usage; 34% growth YOY to more than 45 billion quarterly member page views; and 101% growth YOY to more than 7 million active job listings.

The benefits of LinkedIn’s relationship with Microsoft, and the  opportunity for LinkedIn due to the combination of Microsoft’s cloud and LinkedIn’s network, were cited by Weiner in the Microsoft acquisition announcement. Weiner also commented on the deal in his blog post on the LinkedIn site

Microsoft said the transaction has been unanimously approved by the boards of directors of both LinkedIn and Microsoft. The deal is subject to approval by LinkedIn’s shareholders, the satisfaction of certain regulatory approvals and other customary closing conditions.

Commenting on the acquisition, Paul Daugherty, chief technology officer of Accenture and Chairman of Avanade, said the acquisition is a powerful demonstration of what Accenture calls the “Liquid Workforce,” where people, processes and organizations are becoming even more interconnected through cloud and digital technologies.  "This is a bold step by Microsoft that recognizes the need for enterprises to do things differently, be more nimble  and embrace disruption to extend their leadership in the market," he said. "By combining LinkedIn with technologies such as Office365, Dynamics, Skype, and Azure, Microsoft will have a powerful platform for driving productivity in the workplace - and can take new innovative approaches in areas such as sales enablement, talent management, business process automation, and crowdsourcing.  Accenture and Avanade look forward to helping organizations shape their Liquid Workforce strategies to take advantage of the new enterprise capabilities that emerge from this unique joining of two recognized leaders.”