Microsoft Agrees to Buy LinkedIn for $26.2Bn

Microsoft has agreed to buy LinkedIn for $26.2 billion in cash, the companies said in a statement on Monday.

Jeff Weiner, LinkedIn Chief Executive will continue at the helm of the company but will now report to Microsoft CEO Satya Nadella, according to a statement.

LinkedIn will keep its “distinct brand, culture and independence,” the companies said.

Over the past year, LinkedIn has been striving to grow beyond its roots as a resume-on-the-Web service to become more of a daily hub for professionals, much as Facebook has become more than simply a site for sharing family photos. One step in that direction was a thorough upgrade of its mobile app.

The 13-year-old service has approximately 430 million users worldwide. It’s free to use, but charges for features like advanced search and messaging strangers.

The acquisition of LinkedIn would be Microsoft’s biggest acquisition since Nadella took over as CEO two years ago. For Microsoft, the deal marks a furthering of its plan to be an essential provider of cloud-based services for businesses.

“This combination will make it possible for new experiences such as a LinkedIn newsfeed that serves up articles based on the project you are working on and Office suggesting an expert to connect with via LinkedIn to help with a task you’re trying to complete,” Nadella said in an email to employees.

The boards of both companies have endorsed the agreement, which values LinkedIn at $196 per share. The deal is expected to close by the end of 2016.

“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,” Nadella said in a statement.

“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.

In premarket trading, Microsoft shares were down more than 3 percent to around $49.60. LinkedIn’s shares were up nearly 50 percent to about $194.50.