Business & Economy

Salesforce agrees to buy Slack for $27.7 billion

New York, Dec 1 (efe-epa).- American cloud software giant Salesforce.com Inc. said Tuesday it has agreed to buy workplace messaging app Slack Technologies Inc. for $27.7 billion in cash and stock.

The acquisition would be the largest in the 21-year history of Salesforce, a company that recently surpassed $20 billion in annual revenue and is increasingly positioning itself as a clear competitor of Microsoft’s in the business-software market.

The deal involving the two San Francisco-based companies, which still requires the approval of regulators and Slack’s shareholders, also would constitute the biggest deal in the software industry since IBM’s $34 billion purchase of Red Hat in 2018.

“This is a match made in heaven. Together, Salesforce and Slack will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world,” Marc Benioff, the chief executive officer and founder of Salesforce, said in a prepared statement.

Slack’s CEO and co-founder, Stewart Butterfield, called the acquisition “the most strategic combination in the history of software.” He is expected to join the combined company and continue to run Slack as a unit of Salesforce.

The acquisition has roughly the same price tag as a pair of $27 billion deals: Microsoft’s purchase of LinkedIn in 2016 and London Stock Exchange’s still-pending deal to buy data provider Refinitiv.

Slack, whose shares have climbed nearly 50 percent since the news broke that a deal was in the works, had not inspired much investor enthusiasm after going public in June of last year.

Salesforce is the leading player in the customer relationship management (CRM) segment of the software industry and a cloud software pioneer.

The company has focused on acquiring enterprise software services, including data visualization and analysis service Tableau and cloud software company Vlocity.

Salesforce also sought to acquire LinkedIn in 2016 before being outbid by its larger rival, and it also at one time considered purchasing Twitter.

Despite being a very popular workplace messaging app, Slack has failed to achieve the same level of growth during the coronavirus crisis as other tools such as teleconferencing platform Zoom.

Nevertheless, the enterprise software and cloud services market is a booming industry due to workplace changes that have accelerated amid the pandemic.

Salesforce’s shares were down 1.81 percent at $241.35 at the close of trading Tuesday on Wall Street, while Slack’s shares finished up 2.24 percent at $43.84. EFE-EPA

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