According to a statement from the two firms, Jeff Weiner will remain chief executive of LinkedIn, reporting to Microsoft chief Satya Nadella.
Microsoft said today it was buying the professional social network LinkedIn for $26.2 billion in cash, in its biggest-ever deal, combining the software giant’s fast-growing cloud services business with the world’s largest online network for professionals.
The offer of $196 per share represents a premium of 49.5 percent to LinkedIn’s Friday closing price.
LinkedIn’s shares jumped 48 percent to $194.28 before the opening bell today. Microsoft’s shares were down 3.3 percent.
“This deal brings together the world’s leading professional cloud with the world’s leading professional network,” Microsoft chief executive Satya Nadella said in a statement.
According to a statement from the two firms, Jeff Weiner will remain chief executive of LinkedIn, reporting to Nadella.
“Today is a re-founding moment for LinkedIn,” Reid Hoffman, chairman of LinkedIn’s board, said in a statement.
“I have always had a great admiration for LinkedIn,” Nadella said in a video on Microsoft’s website. “I have been talking with Reid and Jeff for a while … I have been thinking about this for a long time.”
The deal is expected to close in 2016, the companies said in a joint statement. Microsoft said it would issue new debt to fund the deal. After the deal, LinkedIn will become part of Microsoft’s productivity and business processes unit.
The move comes with Microsoft refocusing its efforts away from being a pure software firm, and LinkedIn seeking ways to boost growth.
LinkedIn, which enables members to connect with similar-minded professionals and facilitates job hunting, has some 433 million members worldwide.
But LinkedIn in the past quarter reported a loss of $46 million and a $166 million loss for 2015, which let its shares at multiyear lows early this year.
Nadella, in an email to staff, said the deal reflects Microsoft’s new focus on cloud computing and services.
“We are in pursuit of a common mission centred on empowering people and organisations,” he said.
He added that the deal “is key to our bold ambition to reinvent productivity and business processes. Think about it: How people find jobs, build skills, sell, market and get work done and ultimately find success requires a connected professional world.”
LinkedIn, which calls itself “the world’s largest and most valuable professional network,” has been seeking to expand its offerings with more messaging, mobile applications and revamped its “newsfeed” to help boost engagement.