Microsoft’s acquisition of LinkedIn is its largest acquisition to date
On June 13, 2016, Microsoft (MSFT), one of the leading players in the software space, announced its largest acquisition to date. Microsoft announced its plans to acquire LinkedIn (LNKD) for $26.2 billion in cash. Microsoft is paying $196 for every LinkedIn share, which is a premium of ~50% over its closing price on June 10, 2016.
Satya Nadella, CEO of Microsoft, stated that Microsoft’s acquisition of LinkedIn would “bring together the world’s leading professional cloud with the world’s leading professional network.” Approximately 433 million people all over the world use LinkedIn to connect, explore work opportunities, and network.
LinkedIn will be integrated into Microsoft’s Productivity and Business Processes segment
Once the acquisition is complete, LinkedIn will be a part of Microsoft’s Productivity and Business Processes segment, though it will retain its identity and independence. Moreover, Jeff Weiner, LinkedIn’s CEO, will continue to work and will report to Satya Nadella, CEO of Microsoft.
Microsoft is working aggressively to strengthen and expand its reach in the cloud. The LinkedIn acquisition is likely to provide Microsoft a much-needed boost in the rapidly growing social media and network space.
Earlier this month, Symantec (SYMC) acquired Blue Coat Systems, which is its largest acquisition in more than a decade. June 2016 also saw Salesforce.com (CRM) announce its largest-ever acquisition of Demandware for $2.8 billion.
Later in the series, we’ll discuss how this acquisition is in sync with Microsoft’s “mobile first cloud first” strategy. You can invest in the PowerShares QQQ Trust, Series 1 ETF (QQQ) to gain exposure to Microsoft. MSFT accounts for 8.4% of QQQ. Investors who want application software exposure might also consider QQQ. Application software accounts for ~28.4% of QQQ’s portfolio.