Skip to main content

Microsoft is acquiring GitHub for $7.5 billion

Microsoft has today announced that it is acquiring GitHub for $7.5 billion, confirming recent rumors that had suggested Microsoft was in talks with GitHub for a potential acquisition. According to Microsoft, GitHub is a leading software development platform with other 28 million developers worldwide.

Microsoft CEO Satya Nadella said in a blog post that Microsoft is a developer-focused company that is all in on open source technologies, and reassures developers that Microsoft will take good care of GitHub. Microsoft wants to empower developers at ever stage of the development cycle, increase the use of GitHub with enterprise developers, and bring Microsoft's own developer tools and services to new audiences.

The press release goes on to state that GitHub will continue to operate independently, which may reassure some concerned developers over this acquisition. Microsoft says the acquisition will close later this year, with Nat Firedman heading up the CEO position at GitHub. You can read the full press release below.

Microsoft Corp. on Monday announced it has reached an agreement to acquire GitHub, the world's leading software development platform where more than 28 million developers learn, share and collaborate to create the future. Together, the two companies will empower developers to achieve more at every stage of the development lifecycle, accelerate enterprise use of GitHub, and bring Microsoft's developer tools and services to new audiences."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 terms of the agreement, Microsoft will acquire GitHub for $7.5 billion in Microsoft stock. Subject to customary closing conditions and completion of regulatory review, the acquisition is expected to close by the end of the calendar year.GitHub will retain its developer-first ethos and will operate independently to provide an open platform for all developers in all industries. Developers will continue to be able to use the programming languages, tools and operating systems of their choice for their projects — and will still be able to deploy their code to any operating system, any cloud and any device.Microsoft Corporate Vice President Nat Friedman, founder of Xamarin and an open source veteran, will assume the role of GitHub CEO. GitHub's current CEO, Chris Wanstrath, will become a Microsoft technical fellow, reporting to Executive Vice President Scott Guthrie, to work on strategic software initiatives."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. "Their focus on developers lines up perfectly with our own, and their scale, tools and global cloud will play a huge role in making GitHub even more valuable for developers everywhere."Today, every company is becoming a software company and developers are at the center of digital transformation; they drive business processes and functions across organizations from customer service and HR to marketing and IT. And the choices these developers make will increasingly determine value creation and growth across every industry. GitHub is home for modern developers and the world's most popular destination for open source projects and software innovation. The platform hosts a growing network of developers in nearly every country representing more than 1.5 million companies across healthcare, manufacturing, technology, financial services, retail and more.Upon closing, Microsoft expects GitHub's financials to be reported as part of the Intelligent Cloud segment. Microsoft expects the acquisition will be accretive to operating income in fiscal year 2020 on a non-GAAP basis, and to have minimal dilution of less than 1 percent to earnings per share in fiscal years 2019 and 2020 on a non-GAAP basis, based on the expected close time frame. Non-GAAP excludes expected impact of purchase accounting adjustments, as well as integration and transaction-related expenses. An incremental share buyback, beyond Microsoft's recent historical quarterly pace, is expected to offset stock consideration paid within six months after closing. Microsoft will use a portion of the remaining ~$30 billion of its current share repurchase authorization for the purchase.Simpson Thacher & Bartlett LLP is acting as legal advisor to Microsoft. Morgan Stanley is acting as exclusive financial advisor to GitHub, while Fenwick & West LLP is acting as its legal advisor.

Zac Bowden is a Senior Editor at Windows Central. Bringing you exclusive coverage into the world of Windows 10 on PCs, tablets, phones, and more. Also an avid collector of rare Microsoft prototype devices! Keep in touch on Twitter: @zacbowden.

56 Comments
  • Will this have any kind of effect on MS stock?
  • No, shareholders seem to ignore this level of spend..... 🙄
  • Only when the purchase is a good one :)
  • Github is not only a source code cloud infrastructure, its also used in all Fortune 500 companies for CI/CD so it is pretty much integrated with all IaaS, PaaS and SaaS technologies and agile methodologies.
    This is a huge purchase and will give Microsoft a lot of advantages for moving enterprise software to the cloud in the next decade.
  • GitHub is used for "Corporate Identity"?
  • It's Continuous Integration / Continuous Delivery. It means that any tiny change in code is tested automatically and released automatically as you update the "master" version. This originates from these GitHub repositories, so you may very well be using applications that have been automatically delivered from a repo (to an app store for example).
  • You mean we could be running apps directly from a remote GitHub rep.?
  • Do you think you could ask this in a little broader more vague way? 😁.
    I think the answer is easily, yes. What is more interesting is ' what effect will this have?' - which is much harder.
    But, given the success of their cloud division and the potential broad focus (allowing more entry into other kinds of markets, i would expect this to have a positive impact... Unless they over paid... $7.5B is a lot of money!
  • They overpaid more for Nokia. At least Github is a better choice.
  • The Nokia D & S acquisition was a necessary one and the talent gain would have far outweighed the spend. But it was not given a chance to succeed as a result this is where we are in terms of the mobile space.
  • Haha! Yeah I guess I was hoping someone would naturally elaborate after answering my question. I should've asked it different.
  • Yep over 100$ now
  • From the release, it's a pure stock purchase -- MS isn't paying cash to GitHub, just issuing shares of MS stock to existing GitHub shareholders in exchange for the GitHub stock. However, it also says that they will use cash to buy-back outstanding MS stock, reducing the dilution from the issuance to GitHub shareholders. I suspect that it's about a wash from an accounting perspective. That leaves market perception as the key driver for any share price changes. If the market thinks this will be good for overall earnings over time, you'll see a positive effect. If they think MS over-paid by issuing too much of its own equity ($7.4B) for the purchase, it will take a one-time hit. After that, whether it helps or hurts will be based on how well MS manages the acquisition.
  • Ok, now this is official. Happened so fast.
  • How do you know when the acquisition started?
  • I mean the talks have started no more than a couple of days ago, right? GitHub responded quickly in favor of MSFT, which is really cool.
  • Actually, they've been talking for a couple of years, but talks just recently got very serious.
  • "....and reassures developers that Microsoft will take good care of GitHub" - Satya Nadella The statement funnies me a lot...so he surely knows they haven't been taking good care of Startups and consumers/developers are aware??
  • Yeah, no. GitHub is a really big deal to the functioning of the current Open Source community, so it's a statement recognizing it's importance to it's users. There were similar statements made around the Minecraft acquisition. And GitHub isn't a startup...
  • GitHub will continue to operate independently
    look at Minecraft, look at LinkedIn both doing very well
  • * Conveniently overlooks Xamarin, LinkedIn,....*
  • And for all those scared developers. It says GitHub will stay independent.
  • Yep. MSFT will get what it wants, that's what matters here. Win-win for both.
  • This is HUGE!!!!
  • Hope for the best
  • Well GitHub will continue to operate independently
    Think the goal is to keep it independent and help push it forward.
  • Yeah I'm optimistic
  • Two things to say... 1) Yes this is very true what Friedman said "developers... drive business processes and functions across organizations". Saving my code in the cloud is great, but I'd much rather have a device to run my code on. Surface phone / Andromeda where are you? Do you even exist? 2) Let's just hope M$ doesn't ruin this great little company by totally corrupting the ideals that have made it beloved with its uberfocus on the "almighty" $. At least there's still https://bitbucket.org/. The .org at the end should save it from corruption for a while.
  • (GitHub will continue to operate independently)
    If anything they playing the help given more resources
    And help it a push forward.
    And you could always setup your own server
  • Saving my code in the cloud is great but I'd much rather have a device to run my code on... GitHub is not a website hosting service...
  • Well I just finished reading an article elsewhere about the rumour of a buy-out by Microsoft and it claimed that 69% of developers said they would quit the platform if it went ahead so let's hope that doesn't happen.
  • Can you please post a link to that? That would be an interesting read. And yeah... I kinda believe it. Although M$ won't care because they'll be signing on large Enterprises.
  • Source.
  • How is that LinkedIn adquisition is working for you, Mr Hit Refresh ?
  • Pretty well? 1.3 billion in revenue and 37% growth YoY for the most recent quarter.
  • And... this acquisition makes more sense to me than LinkedIn. Microsoft tools were the best, and this could really solidify movements to a more seamless DevOps future. I also like that Nat Friedman is involved. Devs have been moving away from Microsoft for years (with the possible exception of Azure), but these moves can only help. Sure, some may leave GitHub because of Microsoft owning it, but extremely few. If you're using Azure, there's no point anyway.
  • It Doing pretty well
  • This is awesome. Huge news for the developer community. Now when will they acquire JetBrains? ReSharper and other JetBrains Toolbox features would make a great addition to Visual Studio.
  • Microsoft is Azure now. Customers of Azure are companies and developers, not consumers. Microsoft won't invest in consumers business unless Nadella resigns.
  • Right, which is why they're pumping billions of dollars into Xbox.
  • And IOT + Azure + AI.
    Arcade cabinet, robot, water meter, cashier, surveillance, vending machine, drone, machines in harbor / port run Windows.
  • And IOT + Azure + AI.
    Arcade cabinet, robot, water meter, surveillance, vending machine, drone, machines in harbor / port run Windows.
  • You're wrong if you think Github only helps developers. Most managers in most companies are also impacted since today Github is the base of successful projects, Github requires security against cyberattacks and that's where Microsoft expertise will come in, so all this intellectual property valued in trillions of dollars will be protected in a safely manner by Microsoft.
  • As always, us fans want to know if this could possibly have some type of tangible affect on the Microsoft Store...
  • No. Not even a tenuous and convoluted link between them.
  • Lol
  • This is impressive, many consumers don't understand it, but they way today IT projects are managed in Fortune 500 companies and Agile, Scrum methodologies depend on integration with Github so this pretty much puts Microsoft on very good advantage over its cloud adversaries like Amazon and Alphabet.
    Actually Microsoft will collaborate with Google technologies like Kubernetes which are integrated for deployments with the help of Github.
  • The words “Fortune 500” are spot on. M$ has about as much chance of truly “getting” the open source movement though as McDonalds does of understanding the organic, natural, locally owned, food movement.
  • Wonder if they might open source Windows Core OS.
  • Why do you want that? What benefit can you get? Programmer only care about if they can push one set of code to IOT, AR, MR, PC (incl. S, ARM) and Xbox (even better, to share code between backend and frontend). Let OS absorb the differences == save programmer's time.
  • This is great news. The purchase price is high, quite a premium. I think GitHub had a market cap of about $2B recently (please correct me if that's way off). But I think it's excellent that MS now owns the single biggest tool/service used by software developers. I expect this to help MS encourage more Windows development by making their tools like Xamarin (another good acquisition), which happen to output more readily to Windows, available to more developers. That's excellent news for developers (improved access to to better tools) and for Windows fans who yearn for more developer support.
  • As a token of “good faith” they should open-source the iOS and Android code for Groove. Share it on Github, and allow small devs to take it and run with it.
  • Wow! Try going to GitLab.com today! Sever is swamped. Reaction to the “assimilation” of GitHub? See #movingtogitlab on Twitter.
  • And GitLab runs on Azure servers. Lol not much sense in moving code there to avoid Ms.
  • A good move.
  • It would be interesting to see how this plays out. However it's a major win for Github, as they are still going to be operating independently.