Microsoft to buy GitHub in $7.5B deal

Microsoft Corp. announced Monday it would acquire coding website GitHub in a $7.5 billion, all-stock deal.

“Microsoft is a developer-first company, and by joining forces with GitHub we strengthen our commitment to developer freedom, openness and innovation,” said Satya Nadella, CEO, Microsoft. “We recognize the community responsibility we take on with this agreement and will do our best work to empower every developer to build, innovate and solve the world’s most pressing challenges.”

Under the deal, Microsoft’s Nat Friedman will take over as GitHub CEO, while the privately held code repository company’s current chief executive will become a Microsoft technical fellow tasked with working on strategic software initiatives.

On an adjusted basis, Microsoft expects the transaction to decrease earnings per share by less than 1% in fiscal years 2019 and 2020 and add to its operating income in fiscal year 2020. It said GitHub’s financials will be reported as part of the Intelligent Cloud segment.

GitHub, which has more than 28 million developers, will allow developers to continue to use the programming languages, tools and operating systems of their choice for projects, and can still deploy their code to any operating system, any cloud and any device, Microsoft said.

“The era of the intelligent cloud and intelligent edge is upon us,” Microsoft CEO Satya Nadella wrote in a blog post on Monday. “Computing is becoming embedded in the world, with every part of our daily life and work and every aspect of our society and economy being transformed by digital technology.”

Microsoft’s acquisition of GitHub is expected to close by the end of the calendar year.

The tech giant had its own rival to GitHub called CodePlex, launched in 2006, though it shut it down last year, citing competition from the former.

“Over the years, we’ve seen a lot of amazing options come and go but at this point, GitHub is the de facto place for open source sharing and most open source projects have migrated there,” Microsoft’s Brian Harry wrote in a blog post in late March 2017.

Shares of Microsoft were slightly higher in early morning trade on Monday after the acquisition was announced. The tech giant’s stock reached an all-time high of more than $100 on Friday and is up 18% this year.