Mergers & Acquisitions

Microsoft to Buy GitHub in $7.5B Deal

Microsoft pledges to keep GitHub a platform-agnostic service for developers.
William SprouseJune 4, 2018
Microsoft to Buy GitHub in $7.5B Deal

Microsoft announced it has reached a deal to buy the code-hosting service GitHub for $7.5 billion in an all-stock transaction.

The cloud-based service allows companies to work on code collaboratively. Microsoft has said more than 27 million developers use GitHub to work on more than 85 million repositories of code.

News that the companies were in talks was first reported by Business Insider on Friday.

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Microsoft said Corporate Vice President Nat Friedman would become GitHub CEO, replacing Chris Wanstrath. Wanstrath announced his resignation in August but remained in the job as the company struggled to find a replacement, Business Insider reported.

Wanstrath will become a Microsoft technical fellow, reporting to Executive Vice President Scott Guthrie, to work on strategic software initiatives.

Microsoft said GitHub will continue to operate independently as a platform-agnostic, developer-first service.

“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 of 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.”

GitHub raised $250 million in 2015 led by Sequoia Capital. That deal valued the company at about $2 billion.

The Microsoft transaction is expected to close by the end of the calendar year.

“I’m extremely proud of what GitHub and our community have accomplished over the past decade, and I can’t wait to see what lies ahead. The future of software development is bright, and I’m thrilled to be joining forces with Microsoft to help make it a reality,” Wanstrath said.

Microsoft said it expected GitHub’s financials to be reported as part of its Intelligent Cloud segment after closing.

The GitHub takeover is Microsoft’s third-largest deal on record, behind the 2016 acquisition of LinkedIn ($24.6 billion) and the 2011 purchase of Skype ($$9.1 billion), according to Thomson Reuters.