EU Regulators Approved the Microsoft LinkedIn Deal
After months of behind-the-scenes negotiations, EU regulators will allow the Microsoft LinkedIn deal to pass uncontested. There will be some conditions that Microsoft Corporation (NASDAQ:MSFT) will have to abide by, but it’s a small price to pay.
After all, the Microsoft LinkedIn deal is a major tailwind for MSFT stock.
With the acquisition coming to a close, Microsoft can start to make use of LinkedIn Corp’s (NYSE:LNKD) treasure trove of data. Rivals like salesforce.com, inc. (NYSE:CRM)—which also bid on LinkedIn—have been trying to stop this from happening, most noticeably by appealing to the European Commission (EC).
The EC was were worried that Microsoft would block competitors from using LinkedIn data that is necessary to their business. For instance, many salespeople use LinkedIn as a reservoir of potential clients, but Microsoft hinders their cold-calling efforts. (Source: “Europe has given the OK to the Microsoft/LinkedIn acquisition, deal to close ‘in days’,” Business Insider, December 6, 2016.)
Salesforce.com made urgent appeals to the European Union’s (EU) antitrust division, arguing such practices would undercut competition and increase Microsoft’s stranglehold in some business areas.
But their efforts seem to have been in vain. EU authorities chose to approve the deal, as did their counterparts in the U.S., Canada, Brazil, and South Africa. No approval is required in Japan, South Korea, or China, so it appears that the Microsoft LinkedIn deal has global support.
Of course, there were a few caveats.
The European Commission ruled that Microsoft cannot boost LinkedIn through “Microsoft Office” or “Windows.” It has to give other apps a chance to survive. While this is a minor win for salesforce.com, it does nothing to democratize the use of LinkedIn’s data.
Microsoft still has full control of that, and so it should. Fair or not, the $26.0-billion price tag on the Microsoft LinkedIn deal implied exclusivity. It was one of the most expensive acquisitions in history specifically because it could reap enormous rewards for MSFT stock.
Salesforce.com competed in the bidding process and lost, but that doesn’t mean it can sabotage the deal “ex post.” The fight is over; Microsoft has won. The politicking required to pass the Microsoft LinkedIn deal is done, leaving the company free to return to moneymaking.