Microsoft has agreed to buy social networking site LinkedIn for $26.2 billion.
The all-cash transaction will see LinkedIn retain its own brand and independence with current CEO Jeff Weiner remaining in his position and reporting directly to Microsoft CEO Satya Nadella.
The deal values shares in the work-focused social networking giant at $196 each.
Microsoft announced the deal on its site with Nadella saying: "The LinkedIn team has grown a fantastic business centered on connecting the world’s professionals."
"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."
Weiner said that the relationship with Microsoft and the combination of the Azure cloud with LinkedIn’s network would give the two companies a chance to change the way the world works.
More than 433 million people use the LinkedIn network to find jobs and to reconnect with old colleagues, it also has a large number of members that pay to use the premium service on the site.
The transaction has been unanimously approved by the boards of directors of both companies and is expected to close this calendar year, subject to approval by LinkedIn shareholders and regulatory approvals.
Microsoft said that it plans to finance the transaction primarily through the issue of new indebtedness.
Once the deal is closed, LinkedIn’s financial results will be reported as part of Microsoft’s Productivity and Business Process segment.
The social networking site has seen 19% year-over-year grown in membership in addition to a growing number of customers using mobiles to access it.
This isn’t Microsoft’s first venture into the social networking space having spent $1.2bn on Yammer four years ago, it was also an early investor in Facebook, however, it has struggled to make an impact in the area.
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