The transaction, which is expected to close this year, has to be approved by LinkedIn shareholders. A meeting and vote could be held as early as mid-July. The deal is also subject to government review.
Shares of LinkedIn skyrocketed $61 a share to $193 after the announcement, while Microsoft’s stock was down about 3%. Trading in Microsoft was halted briefly before the announcement.
According to the press release from Microsoft, LinkedIn will retain its distinct brand, culture, and independence. Jeff Weiner will remain CEO of LinkedIn, reporting to Satya Nadella, CEO of Microsoft. Reid Hoffman, chairman of the board, co-founder and controlling shareholder of LinkedIn, and Weiner both fully support this transaction.
“The LinkedIn team has grown a fantastic business centered on connecting the world’s professionals,” Nadella said in the press release. “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.”
“Just as we have changed the way the world connects to opportunity, this relationship with Microsoft, and the combination of their cloud and LinkedIn’s network, now gives us a chance to also change the way the world works,” Weiner said. “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.”
The deal is expected to close this calendar year, subject to approval by LinkedIn’s shareholders, the satisfaction of certain regulatory approvals and other customary closing conditions.
“Today is a re-founding moment for LinkedIn. I see incredible opportunity for our members and customers and look forward to supporting this new and combined business,” said Hoffman. “I fully support this transaction and the Board’s decision to pursue it, and will vote my shares in accordance with their recommendation on it.”
Microsoft will finance the transaction primarily through the issuance of new indebtedness. Upon closing, Microsoft expects LinkedIn’s financials to be reported as part of Microsoft’s Productivity and Business Processes segment.
LinkedIn released a video on the acquisition featuring Nadella and Weiner earlier this morning.