Microsoft in major deal to acquire LinkedIn

Microsoft is acquiring the professional social network LinkedIn 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, which largely missed out on the consumer web boom dominated by the likes of Google and Facebook, 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.

Microsoft will pay $196 per share in an all-cash transaction, including LinkedIn’s net cash, a 49.5 percent premium to LinkedIn’s closing price Friday. LinkedIn will retain its brand, culture and independence, and Jeff Weiner will remain chief executive of the social network, Microsoft said in a statement.

The price relative to LinkedIn’s earnings makes the transaction the most expensive of any major deal this year, according to Bloomberg data.

“This is about the coming together of the leading professional cloud and the leading professional network,” Nadella said. “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 Nadella, 48, focuses on appealing to business customers with cloud-based services and productivity tools rather than regular customers. In a presentation announcing the deal, Redmond, Washington-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, Skype, Office productivity tools like Excel and PowerPoint, and other Microsoft products. Bloomberg