UPDATE 7-Microsoft to buy LinkedIn for $26.2 bln in its largest deal

Mon Jun 13, 2016 8:10pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

(Adds LinkedIn's revenue, details on Microsoft's automation product Dynamics)

By Sarah McBride

June 13 (Reuters) - Microsoft Corp will buy LinkedIn Corp for $26.2 billion in its biggest-ever deal, a bold stroke by Microsoft CEO Satya Nadella in his efforts to make the venerable software company a major force in next-generation computing.

By connecting widely used software like Microsoft Word and PowerPoint with LinkedIn's network of 433 million professionals, the combination could enable Microsoft to add a suite of sales, marketing and recruiting services to its core business products and potentially challenge cloud software rivals such as Salesforce.com Inc..

"LinkedIn and Microsoft really share a mission" of helping people work more efficiently, said Microsoft CEO Nadella in a conference call with analysts. "There is no better way to realize that mission than to connect the world's professionals."

The $196-per-share price tag represented a premium of almost 50 percent over LinkedIn's stock market value as of Friday, but was still well below the social media company's all-time high of $270. Analysts said the price was rich, and Microsoft's stock closed down 2.7 percent at $50.14.

Still, there was cautious optimism that this could be one of the relatively few tech mega-mergers that works out well. "It's a massive growth play for Microsoft," said Forrester analyst Ted Schadler.

The deal may also help spur further mergers and acquisitions in the tech sector, where a broad correction is bringing down the prices of public and private companies even as a handful of major players sit on large cash piles.

For LinkedIn, founded in 2002 and launched the following year by Reid Hoffman, one of Silicon Valley's most-visible investors and entrepreneurs, the sale marks the end of a classic startup run: funding from top-tier venture capitalists, a long period of building the company and developing a revenue base, then a big initial public offering, followed by a roller-coaster stock price and finally an acquisition.   Continued...