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It’s true: Microsoft is buying Skype for $8.5 billion in cash. The release just crossed the wire, confirming the reports that have been swirling since last night. In a sign of the significance of the acquisition, Skype won’t be absorbed into an existing Microsoft group but will become a new business division inside Microsoft, led by Skype CEO Tony Bates as the division’s president, reporting to Microsoft CEO Steve Ballmer.

It’s the largest acquisition in Microsoft’s history.

Microsoft cites the potential for Skype to support Xbox, Windows Phone and Kinect, and the company says it will connect Skype users to Outlook, Lync, Xbox Live and other existing Microsoft communities. The company also promises in the news release that it “will continue to invest in and support Skype clients on non-Microsoft platforms.”

Both boards have approved the deal, and it will be subject to regulatory approval. Microsoft and the Skype investor group, led by Silver Lake, say they hope to receive the required approval this year.

“Skype is a phenomenal service that is loved by millions of people around the world,” says Ballmer in the news release. “Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world.”

Follow-up: Microsoft banking on Skype brand, user base to justify gigantic deal

Previously: Skype and Kinect could be Microsoft’s killer combo

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