Microsoft officially acquires Skype for $8.5 billion

Microsoft officially acquires Skype for $8.5 billion

2011-10-15 06:22:57 GMT+7 (ICT)

REDMOND, WASHINGTON (BNO NEWS) -- Microsoft Corp. announced on Friday that it has officially acquired Internet communications company Skype Global S.a r.l. for $8.5 billion.

The announcement comes just one week after the European Union's Commission cleared the acquisition under the EU Merger Regulation, arguing that the deal would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

The acquisition proposal was first announced on May 10 when Microsoft said it had entered into a definitive agreement to acquire Skype after the boards of directors of both companies approved the agreement. The tech company said negotiations were led by investor group Silver Lake.

With around 663 million users worldwide, Skype, which is based in Luxembourg, is the world's most popular Internet communications service company, and the acquisition is expected to provide a big push for Microsoft's online services. It is expected to support several of Microsoft's devices such as the Xbox and Kinect, Windows Phone, and connect Skype users with Lync, Outlook, Xbox Live and other communities.

"Microsoft and Skype will remain focused on their shared goal of connecting all people across all devices and accelerating both companies' efforts to transform real-time communications for consumers and enterprise customers," Microsoft said in a statement, adding that Skype will now be officially introduced as a new business division within the company.

Skype CEO Tony Bates has now also assumed the title of president of the Skype Division at Microsoft, reporting directly to Microsoft CEO Steve Ballmer. Also, Skype employees will continue to be located around the world in offices including in Estonia, the Czech Republic, Russia, Sweden, the United Kingdom, Luxembourg, Japan, Singapore, Hong Kong, and the United States.

The Skype division is expected to continue to offer its current products to users globally. In the longer term, Skype is also expected to be integrated across Microsoft's products.

Founded in 2003, Skype was acquired by eBay in September 2005 and then acquired by an investment group led by Silver Lake in November 2009.

Under Silver Lake's leadership, monthly calling minutes have increased by 150 percent over the past 18 months, developing new revenue streams and strategic partnerships, acquiring the intellectual property powering its peer-to-peer network, and recruiting an outstanding senior management team.

Other members of the selling investor group led by Silver Lake include eBay International AG, CPP Investment Board, Joltid Ltd. in partnership with Europlay Capital Advisors and Andreessen Horowitz.

The acquisition, which represents Microsoft's biggest ever, remains under review in a few countries and will be completed in those countries when such reviews are closed.

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