Microsoft Corp. is acquiring the professional social network LinkedIn Corp. for $26.2 billion, one of the largest technology industry deals on record, as the maker of Windows software attempts to put itself at the center of people's business lives.
The deal is a way for Microsoft to sprint ahead in social tools — in this case, for professionals. While CEO Satya Nadella has drawn kudos for efforts to reshape the company and reignite sales growth, the board is urging an even faster shift toward software and services delivered over the Internet.
The tech titan has increasingly been shifting its revenue outside the U.S. over the past decade.
Microsoft will pay $196 per share in an all-cash transaction, inclusive of LinkedIn's net cash, a 49.5% premium to LinkedIn's closing price on June 10. LinkedIn will retain its brand, culture and independence and Jeff Weiner will remain CEO of the company, Microsoft said in a statement Monday. The deal is the most expensive relative to earnings of any takeover valued at more than $5 billion this year, according to data compiled by Bloomberg.
“This is about the coming together of the leading professional cloud and the leading professional network,” Mr. Nadella said in an interview. “This is the logical next step to take. We believe we can accelerate that by making LinkedIn the social fabric for all of Office.”
The deal is the biggest ever for Microsoft as Mr. Nadella, focuses on appealing to business customers with cloud-based services and productivity tools rather than regular customers. In a presentation announcing the deal, Redmond, Wash.-based Microsoft outlined a vision in which a person's LinkedIn profile resides at the middle of other pieces of their work life, connecting with Windows, Outlook, Excel, PowerPoint, Skype and other Microsoft products.
Microsoft could build LinkedIn, the largest global professional network, into a major customer relationship management software system for salespeople, pushing into an area dominated by Salesforce.com Inc., said Anurag Rana, a senior analyst for Bloomberg Intelligence.