MICROSOFT - LINKEDIN ACQUISITION

PRESENTED BY:

BISWA BHUSAN SWAIN (UH15012)

XIMB

INTRODUCTION

• Microsoft announced buying LinkedIn for $26.2 billion on 13 June 2016, by paying $196 per share in an

all-cash transaction, including LinkedIn’s net cash, a 49.5 percent premium to LinkedIn’s closing price.

• As Microsoft Chief Executive Satya Nadella told The Wall Street Journal, “It’s really the coming together of

the professional cloud and the professional network.”

• LinkedIn CEO Jeff Weiner will remain CEO of the professional social network, and will report to Microsoft

CEO Satya Nadella.

• Under the terms of the acquisition, LinkedIn will maintain its "distinct brand, culture, and independence.“

• The deal finally closed on 6 December 2016 and Microsoft CEO Satya Nadella outlined where the two

companies are going to integrate their products next.

Sources: http://www.businessinsider.in/Microsoft-just-finalized-its-deal-for-LinkedIn-heres-what-happens-next/articleshow/55878137.cmshttps://www.bloomberg.com/news/articles/2016-06-13/microsoft-to-buy-linkedin-in-deal-valued-at-26-2-billion-ipe079k9

CULTURE OF MICROSOFT

• Microsoft is a technology company that make money selling technology and products

• Culture of accountability which ensures that every employee understands that his actions have

consequences in the company's context.

• Invests heavily in R & D and rewards employees for their innovative contributions.

• Trains employees to identify potential avenues for new business growth and rewards based on

contributions.

• Diversity and Inclusion is an essential factor and company tries to maximize human resource competence

based on diverse ideas and unity among employees.

CULTURE OF LINKEDIN

• Linkedin is a technology based company that leverage technology to sell other products and services

• Built with agile principles at core

• Company's structure is flat and the teams are multi-discipline.

• Involves collaboration across all disciples and all levels using digital platforms as the key infrastructure

rather than siloed systems and applications

• Embraces and relishes challenge, adventures into the unknown, seeing it as the catalyst for innovation and

growth rather than a risk to the business.

A COMMON MISSION

• There are six key levers that can influence the success or failure of a cultural integration initiative:

1. integration teams, which can build the necessary relationships between the two companies

2. speed, which refers to the sense of urgency (not haste) that must accompany the integration

3. leadership, or buy-in to the process from key members of the management team

4. communication, which must be consistent both internally (associates, board) and externally (shareholders,

customers)

5. retention of valuable employees who can help smooth the transition

6. results, which are the ultimate goals of the merger, and which should guide the process

• Integration tools can be utililized to effectively transition key leaders and associates into the new organization that may

include mentoring programs that match up new leaders and employees with counterparts or supervisors in the acquiring

company

• Regular meetings or workshops that help explain and drive home the acquiring company’s culture, business practices, or

policies and procedures

• Networking opportunities such as may be provided by company socials, community service projects, or access to the

company’s online social-networking portal.

STEPS INVOLVED IN CULTURE INTEGRATION

Getting a head start.

• Microsoft and linkedin’s leadership accelerated progress by letting everyone in both organizations know

what their new roles are going to be.

• No one can focus on the greater good until they know what the merger means for them personally.

Managing the message.

• Microsoft and linkedin’s leadership guided what others see and hear

• Rather than letting happenstance or others make those choices for them. the new, combined leadership

team started this process with their current best thinking before day one and adjust steadfastly as they go

along.

Building the new team

• The basic building blocks of a cohesive, high-performing team were put in place

• Direction was set to sustain momentum ,deliver results and evolve as they grow together.

STEPS FOLLOWED IN MICROSOFT-LINKEDIN ACQUISITION

PRE-ACQUISITION SCENARIO

• LinkedIn can utilize Microsoft's field and distribution channels to reachnew audiences and more customers

• Increased Bing engagement with the best professional search

• Empower developers in new ways with rich APIs and new trainingopportunity

• LinkedIn identity and network in Microsoft Outlook and the Office suite

• LinkedIn notifications within the Windows action center

• Enabling members drafting resumes in Word to update their profiles, anddiscover and apply to jobs on LinkedIn

• Extending the reach of Sponsored Content across Microsoft properties

• LinkedIn Learning available across the Office 365 and Windows ecosystem

• Developing a business news desk across our content ecosystem andMSN.com

• Redefining social selling through the combination of Sales Navigator andDynamics 365

• Access to Microsoft's scaled cloud infrastructure and technology stack

CHANGE AND ITS IMPACT

PROBABLE CHANGE MODEL

• Objective of the acquisition is to “accelerate top

line growth.”

• Growth type: inorganic

• Connecting Microsoft's professional cloud with

LinkedIn's professional network

• Merger is highly complementary and will benefit

consumer and enterprise users who will achieve

more through this joint innovation and new

scenarios

ROLE OF HR: DUE DILIGENCE IN THE MERGER

• Probable issues in this merger:

• Fear around job cuts that might follow

• Fear of high risk in the entire process (what if the merger fails to deliver the benefits promised?)

• Fear of being accepted in the new work environment among the employees

• Coming under the purview of new policies

• Microsoft is a software developer and linkedin is a networking app: the work and environment are

different

• Biggest tech m&a: stakes are extremely high

Pre Merger

Valuing the Target and Assessing the benefits for the employees and the organization

Search For Options

Inform the employees and be transparent with the employees regarding the advantages and disadvantages in the merger

Valuation of the Merger and Change Process

Post Merger Integration

• Opportunities for Data and Information from LinkedIn

• Improving and expanding Microsoft’s Product Base

• Opportunity for sustaining as an independent organisation within Microsoft

• Building policies suited for a separate networking business

• $26 billion: Cost of Acquisition

• Most high profile M&A• Additional Bonus for

Employees as a part of the retention deal

• Post Merger frequent feedback and team meets

• Cross team activities among employees of both companies

ADVANTAGES FROM THIS ACQUISITION

• MICROSOFT SAVED $25 BILLION

• MICROSOFT ‘S SKYPE BECOMES HANDY FOR LINKEDIN TO GET PROFESSIONAL VIDEO CALLS

• MICROSOFT WILL BENEFIT FROM LINKEDIN PRODUCTS LIKE LYNDA & SLIDESHARE IN THEIR SOCIAL

INITIATIVES TO IMPROVE QUALITY OF EDUCATION IN DEVELOPING AREAS

• LINKEDIN STARTED GROWING FASTER (START COMING IN ALL DEVICES AND SOFTWARE)

THANK YOU!!