LinkedIn Shares Jump 47% on News of Microsoft Acquisition

In its largest acquisition ever, Microsoft announced Monday that it has entered into an agreement to purchase LinkedIn for $26.2 billion, or $196 per share. The all-cash transaction, which includes LinkedIn’s net cash balance, is expected to close later this year.

LinkedIn is the world’s largest professional network, with 433 million members. In the last year, the company has beefed up its mobile app, acquired online learning platform Lynda.com, and rolled out a new version of its Recruiter product to enterprise customers. Growth year-over-year is currently 19 percent, with 49 percent growth YOY in mobile usage.

For Microsoft, the acquisition provides a stronger foothold in the professional market and access to a broader range of tools used in the work environment. In a letter to employees, CEO Satya Nadella called the LinkedIn acquisition “key to our bold ambition to reinvent productivity and business processes.” “LinkedIn and Microsoft really share a mission” of helping people work more efficiently, he told analysts in a conference call. “There is no better way to realize that mission than to connect the world’s professionals.”

Jeff Weiner will remain chief executive of LinkedIn, reporting to Nadella. In a phone call with Reuters, Weiner said LinkedIn would remain an independent entity in the same way that YouTube remains relatively independent from parent Alphabet or Instagram from parent Facebook.

According to the Reuters report, Microsoft plans to speed-up monetization of LinkedIn by boosting individual and organization subscriptions as well as targeted advertising.