Microsoft to buy LinkedIn for 262 billion

Microsoft has just announced that it will be acquiring the social networking site for professionals, LinkedIn for $26.2 billion in an all-cash deal. LinkedIn will retain its “distinct brand, culture, and independence, and existing CEO Jeff Weiner will continue at the helm of the company and report directly to Sathya Nadella,” the company said.

“The LinkedIn team has grown a fantastic business centered on connecting the world’s professionals,” 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.” Microsoft is planning to close its acquisition later this year, and the deal has been unanimously approved by the boards of directors of both companies.

This is the biggest deal for the Redmond-based company after CEO Sathya Nadella took over the top job more than a couple of years ago. The company acquired the video-calling company Skype in 2011 for $8.5 billion. Microsoft is positioning the combination as the “world’s leading professional cloud” together with the “world’s leading professional network.”

LinkedIn has more than 430 million active users worldwide, uses this platform to find jobs and connect with old friends and colleagues.  It’s free to use, but charges for some premium services.

Microsoft doesn’t have a successful track in big acquisitions, though. The company spent almost two years with its $7 billion takeovers of Nokia’s phone business and finally it is going to get away from phone business.

The boards of both LinkedIn and Microsoft have endorsed the deal, which values LinkedIn at $196 per share. That’s up well from Friday’s closing price of $131.08 and from the company’s low for the last 12 months of about $101 in early February, the result of a one-day plunge that followed disappointing projections for the coming year.

In early trading, Microsoft shares were down more than 3 percent to $49.60. LinkedIn’s shares were up nearly 50 percent to $193.25.

The deal is expected to close by year’s end.