Microsoft (MSFT) is set to acquire GitHub for $7.5 billion in Microsoft stock. This would be its third-largest deal following the acquisition of LinkedIn and Skype for $26.2 billion and $8.5 billion, respectively. The company expects this transaction to be completed by the end of 2018.
Satya Nadella, Microsoft’s CEO, noted on June 4, “Microsoft is a developer-first company, and by joining forces with GitHub we strengthen our commitment to developer freedom, openness and innovation.”
The chart below shows the top five acquisitions struck by Microsoft. LinkedIn leads the pack and is followed by Skype and GitHub.
Following the acquisition, GitHub is expected to function independently, offering an open-source platform to developers from a variety of industries. GitHub is expected to become part of Microsoft’s Intelligent Cloud.
Microsoft corporate vice president Nat Friedman, who has extensive experience in the open-source platform, is expected to lead GitHub as its CEO. According to Microsoft’s release, “GitHub’s current CEO, Chris Wanstrath, will become a Microsoft technical fellow, reporting to Executive Vice President Scott Guthrie, to work on strategic software initiatives.”
Microsoft believes that the deal would be accretive to non-GAAP operating income in fiscal 2020.
Launched in 2008, GitHub is the world’s largest open-source software development platform and code repository. More than 28.0 million developers have used this open-source platform. GitHub’s open-source platform is used by industry giants such as SAP, IBM (IBM), Google (GOOGL), PayPal (PYPL), and Walmart (WMT).