Microsoft to Purchase LinkedIn For Over $26 Billion

Microsoft (NASDAQ:MSFT) is set to purchase LinkedIn (NYSE:LNKD). On Monday, the BBC reported that Microsoft would purchase the professional networking website for just over $26 billion dollars in cash.
The software company is going to pay $196 per share, constituting almost a 50 percent premium over the current market rate.
 

Benefits for Microsoft

The acquisition of LinkedIn will be a benefit to Microsoft in several different ways, helping it boost sales of its business and e-mail software and giving it access to the world’s largest professional social network. Ben Wood, head of research at CCS Insight, told the BBC that this massive online network is “a valuable asset that can be deeply integrated with a number of Microsoft assets such as Office 365, Exchange and Outlook.”
However, Microsoft has also assured the public that LinkedIn would retain its “distinct brand, culture and independance.” Therefore, although the benefits of integration are numerous, it remains to be seen how closely entwined the two companies will actually become.

Investor backlash

Although Microsoft has enumerated the multiple benefits of the acquisition, investors are slightly more wary. Share price of the software giant dropped by 2.57 percent on Monday after the news was released. This minor drop comes on the heels of several months of losses. Year to date, the company has seen a 9.6-percent loss in share price.
It remains to be seen what will happen for both LinkedIn and Microsoft. Both companies have had a challenging 2016 but this new partnership could spell the change they need to close the year out on a high note.
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Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.