Sunday 19 November 2017

Irish job cuts unlikely as Microsoft pays €23.3bn for LinkedIn

Professional site LinkedIn has over 430 million members. Photo: Bloomberg
Professional site LinkedIn has over 430 million members. Photo: Bloomberg

Adrian Weckler in San Francisco

A $26.2bn (€23.3bn) takeover of LinkedIn by Microsoft will see the combined entity employ over 2,000 people in Ireland.

The two companies are unlikely to combine operations or shed jobs as a result of Microsoft's biggest ever acquisition, with both having just invested in major new buildings around Dublin.

Microsoft employs over 1,200 people in Ireland, while LinkedIn has 1,000 employees at its Dublin 4 offices.

The takeover deal, which values each LinkedIn member at €53, saw shares of Microsoft fall as investors show concern over such a large outlay of cash for an online networking site.

LinkedIn makes money through subscriptions and advertising revenue, although growth in its ad money fell to 20pc per year form 56pc per year a year ago.

"I have always had a great admiration for LinkedIn," Microsoft ceo Satya Nadella said in a video on Microsoft's website.

"I have been thinking about this for a long time." Microsoft will pay $196 per share in an all-cash transaction, resulting in a 49.5pc premium to LinkedIn's closing price the day before.

According to the two companies, LinkedIn will retain its "brand, culture and independence" and Jeff Weiner will remain ceo of the company.

The offer values LinkedIn about 91 times earnings before interest, taxes, depreciation and amortisation.

That's the highest multiple of any takeover valued at more than $5bn this year, the data shows.

The deal is the largest under the tenure of Microsoft chief executive Satya Nadella, who has been reshaping Microsoft since taking over in 2014 to appeal more to business customers with cloud-based services and productivity tools.

LinkedIn isn't an obvious fit in the ongoing restructuring, but gives Microsoft the biggest global social network for professional that's used by job seekers, recruiters and human resources teams.

In a statement, Nadella said the acquisition could drive growth for LinkedIn as well as Microsoft's Office 365 and Dynamics services.

"Just as we have changed the way the world connects to opportunity, this relationship with Microsoft, and the combination of their cloud and LinkedIn's network, now gives us a chance to also change the way the world works," Linkedin chief executive Weiner said in the statement.

Irish Independent

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