LinkedIn (LNKD) to be acquired by Microsoft (MSFT) for $26.2 billion

     

• LinkedIn (LNKD) to be acquired by Microsoft (MSFT) for $26.2 billion or $196/share.  (6/13/16)

Microsoft Corp. snapped up LinkedIn Corp. for $26.2 billion in the largest acquisition in its history, betting the professional social network can rev up the tech titan’s software offerings despite recent struggles by both companies.

The deal is Chief Executive Satya Nadella’s latest effort to revitalize Microsoft, which was viewed not long ago as left behind by shifts in technology. Mr. Nadella hopes the deal will open new horizons for Microsoft’s Office suite as well as LinkedIn, both of which have saturated their markets, and generally bolster Microsoft’s revenue and competitive position.

For instance, connecting Office directly to LinkedIn could help attendees of meetings learn more about one another directly from invitations in their calendars. Sales representatives using Microsoft’s Dynamics software for managing customer relationships could pick up useful tidbits of background on potential customers from LinkedIn data.

Microsoft also sees opportunities in Lynda.com, a channel for training videos that LinkedIn bought for $1.5 billion last year. Microsoft will be able to offer Lynda’s videos inside its own software, such as Excel spreadsheets.

Jeff Weiner, CEO of LinkedIn (left) and chairman Reid Hoffman (right) with Satya Nadella, CEO of Microsoft (centre).

Microsoft will pay $196 per LinkedIn share, a 50% premium to the social network’s closing price on Friday. Both boards approved the deal, and Reid Hoffman, LinkedIn’s chairman and controlling shareholder, supports the transaction. LinkedIn Chief Executive Jeff Weiner will keep his current job when the deal closes, which the companies expect to happen by the end of the year.

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Why did Microsoft's bid for LinkedIn reach an astronomical $26.2B? Well, there could have been other offers involved. Bloomberg reveals that Salesforce (NYSE:CRM) was bidding for the professional social network before it agreed to the record deal with Microsoft (NASDAQ:MSFT). LinkedIn's (NYSE:LNKD) recruiting/jobs products could've complemented Salesforce's cloud CRM apps, and its user data would've likely been integrated with the applications.