Microsoft To Acquire LinkedIn For $26 Billion, Its Largest-Ever Acquisition

Microsoft Corporation MSFT announced Monday morning it has reached an agreement to acquire LinkedIn Corp LNKD for $196 per share, or $26.2 billion, inclusive of LinkedIn's net cash.

Shares of LinkedIn closed at $131.08 on Friday and quickly surged higher by nearly 50 percent Monday to trade near the buyout price. On the other hand, shares of Microsoft were trading lower by more than 3 percent at $51.48.

As part of the agreement, Jeff Weiner will remain CEO of LinkedIn and will report directly to Microsoft's CEO Satya Nadella. The transaction has already been unanimously approved by the Board of Directors of both companies and is expected to close by the end of 2016.

Microsoft will fund the transaction through the issuance of new debt and is expected to be accretive to its non-GAAP earnings per share in fiscal 2019 or less than two years post-closing.

Microsoft cited the following reasons to justify its acquisition of LinkedIn: 1) a 19 percent membership growth year-over-year to more than 433 million, 2) a 9 percent growth in unique visiting members per month, 3) a 49 percent growth in mobile usage, 4) a 35 percent growth to more than 45 billion quarterly member page views, and 5) a 101 percent growth to more than 7 million active job listings.

"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."

"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."