Tuesday, 05 June 2018 05:09

Microsoft buys GitHub for A$9.79b, deal to close by year-end Featured

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GitHub chief executive Chris Wanstrath, Microsoft chief executive Satya Nadella and Microsoft corporate vice-president, Developer Services, Nat Friedman. GitHub chief executive Chris Wanstrath, Microsoft chief executive Satya Nadella and Microsoft corporate vice-president, Developer Services, Nat Friedman. Supplied

Software behemoth Microsoft has announced that it is acquiring software code repository GitHub for US$7.5 billion (A$9.79 billion) in Microsoft stock.

The announcement had been widely expected, with nearly every technology news site of note reporting it on Monday. The deal is expected to close by the end of 2018.

A statement from Microsoft said GitHub had something in the region of 28 million developers working on 80 million repositories. Microsoft has been one of the bigger code contributors to the site.

The reaction from open-source developers to the news has not exactly been salutary as can be seen from the embedded tweets and comments on Linux Weekly News.

“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, chief executive of Microsoft.

“We recognise 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.”

Microsoft Corporate vice-president Nat Friedman, founder of Xamarin and an open source veteran, will assume the role of GitHub chief executive. GitHub’s current chief executive, Chris Wanstrath, will become a Microsoft technical fellow, reporting to executive vice-president Scott Guthrie, to work on strategic software initiatives.

After the deal is closed, Microsoft said it expected 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% to earnings per share in fiscal years 2019 and 2020 on a non-GAAP basis, based on the expected close time frame," the company said.

"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 approximately US$30 billion of its current share repurchase authorisation for the purchase."

Photo: courtesy Microsoft

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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