Microsoft is planning on acquiring LinkedIn for a whopping $26.2 billion

Microsoft to acquire LinkedIn

In what might undoubtedly be referred to as the most popular acquisition of 2016, Microsoft Corporation is planning on closing an acquisition deal worth a staggering $26.2 billion (approximately Rs. 1.76 lakh crore) in cash in an effort to acquire the business-oriented social networking service, LinkedIn.

The breaking news has spread like wildfire and has got all the corporate world maestros abuzz. Many were expecting something on these lines as this was but one of several times that Microsoft has entered talks to buy LinkedIn in the given time frame. Stalwarts of the industry are hailing the fact that the board of directors of both the companies gave a unanimous approval as a very rare occurrence. 

Those of you on the professional front who have vested interests in LinkedIn and are deeply concerned about its future hereafter can find solace in knowing that Chief Executive Jeff Weiner will be retaining his post. “The LinkedIn team has grown a fantastic business centered on connecting the world’s professionals,” Nadella said. “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.”

Microsoft Corp. is known for its stealthy moves and all the spotlights are on it since this is the first major acquisition since Satya Nadella became CEO. Microsoft is surely planning on capitalizing on LinkedIn’s 433 million user database. Many might even argue that this has been the greater product targeting move as almost all of the LinkedIn users are primarily engaged in building a worldwide network and finding jobs while some of them pay premiums to promote or endorse themselves. 

Microsoft is continuing on its path of connecting its products and making them more intelligent. It has constantly adopted the same strategy in an effort to dominate the market share. A flawless LinkedIn integration into Microsoft products, especially Outlook, would do wonders for them. This would set the Office line of products miles ahead of anything even remotely close, such as OpenOffice. The increase in productivity and information retrieval would catch the fancy of every office place in existence.

For the particular deal in question, Microsoft plans on financing the transaction primarily through the issuance of new debt. The LinkedIn shares have been valued at $196 apiece by Microsoft, representing a premium of around 49.5% from Friday’s closing market price. The mediators of the deal are Morgan Stanley as a financial advisory to Microsoft Corp. while from LinkedIn’s side we have Qatalyst Partners and Allen & Company LLC as financial advisers.

Nevertheless, not all numerically and statistically superficial deals bear fruit in a changing dynamic marketplace such as the current world.

For now, it would be in our best interest to see what these two giants produce synergistically.

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