Microsoft Buys Skype for $8.5 Billion Deal – Skype Technologies SA’s owners refused to entertain offers of less than $7 billion, the value they expected the startup to get from a planned initial public offering, before agreeing to a buyout from Microsoft Corp. (MSFT), according to people with knowledge of the talks.
Microsoft Chief Executive Officer Steve Ballmer clinched the $8.5 billion all-cash agreement May 9, just more than a month after his initial overture to private equity firm Silver Lake, one of Skype’s biggest owners, said the people, who asked not to be identified because the talks were private.
“Microsoft really wanted this,” said Matt McCormick, a money manager for Cincinnati-based Bahl & Gaynor Inc., which oversees $3.6 billion, including Microsoft shares. “Microsoft right now is trying to do things to keep up with other faster- growing technology companies.”
The acquisition will result into Skype being a new business division within Microsoft, and Skype CEO Tony Bates will assume the title of president of the new Microsoft Skype Division. He will be reporting directly to Steve Ballmer.
“Microsoft and Skype share the vision of bringing software innovation and products to our customers,” said Tony Bates. “Together, we will be able to accelerate Skype’s plans to extend our global community and introduce new ways for everyone to communicate and collaborate.”
Microsoft Buys Skype for $8.5 Billion Deal