Microsoft To Purchase LinkedIn For $26.2bn

The social network's shares soared by 49% on news of the acquisition, which is set to be completed by the end of the year

LinkedIn, based in California, opened for business in December 2002

Microsoft has signed a surprise deal to buy the professional social network LinkedIn for $26.2bn (£18.3bn) in cash.

In a statement, the tech company said LinkedIn would "retain its distinct brand, culture and independence" following the acquisition.

Microsoft is to pay $196 (£139) per share for the growing company - a 50% premium on the stock's closing price last Friday.

LinkedIn, which boasts more than 430 million users worldwide, allows people to network with fellow professionals, upload their CVs and apply for jobs.

Jeff Weiner will continue to head the social network, and will report to Microsoft's chief executive Satya Nadella.

The acquisition comes four years after LinkedIn was hit by a major cyber attack - and last month a hacker caused alarm by claiming he had more than 100 million logins for sale.

Shares in LinkedIn surged 47.8% on the news, while Microsoft's share price fell 4.1%.

In a joint statement, both companies said they expected the deal to close this year.

Mr Weiner hopes the merged companies can 'change the way the world works'

LinkedIn reported a net loss of $45.8m in the three months to 31 March, compared with $42.5m a year earlier.

However, it has enjoyed 19% year-on-year growth in its user base, and has seen impressive increases in page views and job listings in recent months.

Microsoft has been trying to move away from being solely a software company by focusing on services and cloud computing, while boosting growth has been a priority for LinkedIn.

Priorities for the newly merged company will likely include speeding up monetisation by growing subscription revenues and increasing the use of targeted advertising.

"For the last 13 years, we’ve been uniquely positioned to connect professionals to make them more productive and successful, and I’m looking forward to leading our team through the next chapter of our story," Mr Weiner said.

Although Microsoft has paid a substantial premium for LinkedIn, the social network has been sold for considerably less than its peak of $270 a share in 2015.

Shares tumbled earlier in the year after it reported lower-than-expected revenues and a weak profit forecast, both of which were blamed on slowing online ad revenue and the global economic slowdown.

The deal has been unanimously approved by the boards of both companies - however, the acquisition will have to be approved by regulators in the US, Canada, Brazil and the EU.

Source: Sky News