According to Microsoft chief executive Satya Nadella, This deal would combine the company’s rising cloud services business with one of the largest online networks in the world for professionals.
The offer of $196 per share represents a premium of 49.5 per cent to LinkedIn’s Friday closing price. LinkedIn’s shares increased to 48 per cent to $194.28 before the opening bell today. Microsoft’s shares were down 3.3 per cent.
The chief executive of LinkedIn Jeff Weiner will remain with the company in the same position and will be reporting to Nadella. This was disclosed by the two companies in a joint statement.
The decision to buy LinkedIn was a long time coming as the two firms have been discussing this venture for a really long time. Nadella said that he has always had profound respect for LinkedIn and the chairman of LinkedIn’s board, Reid Hoffman believes that this will become a very re-founding moment for the company and its future.
At the end of 2016, the deal is estimated to come to a close. Microsoft said it would issue new obligation to finance the arrangement. Once the deal is made, LinkedIn will be merged into becoming a part of Microsoft’s productivity and business processes unit.
This venture will allow Microsoft to create a more dynamic company instead of solely being a software firm and will help LinkedIn develop and growth into a stronger firm.
Microsoft:
will be able to focus on cloud computing and services with a mission that centers on empowering people and organizations. This deal will also enable the company to recreate the way certain business processes are conducted and how productivity can be improved on. For example the company can innovate new ways on how people find jobs, build skills, sell, market and get work done, and mostly establish a connected professional world.
Has been looking for new innovative ways on how it could improve or expand its offerings with more messaging, mobile applications and boost engagement.
Currently with almost 433 million members worldwide, LinkedIn empowers individuals to associate with similar-minded professionals and accelerates their ability to search for job opportunities.
Despite its success the company did incur a loss of $46 million in the last quarter and $166 million in 2015 which is the reason why its shares at multiyear lows early this year.
