Salesforce edges closer to potential record deal to buy Slack

26 Nov 20207.38k Views

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A deal for Salesforce to buy Slack could be imminent, with expectations it would be a record acquisition deal for a software company purchase.

One of the most familiar remote-working tools of the Covid-19 era could soon have a new owner. According to The Wall Street Journal, Salesforce is in advanced talks to buy Slack with a deal potentially closed in the next few days before Salesforce reveals its latest earnings report.

Sources familiar with negotiations said that while there is no guarantee that a deal could be agreed, it could be Salesforce’s largest ever acquisition. While the terms of the deal are not public, Slack’s market value soared to more than $20bn after The Wall Street Journal’s original report.

Spokespeople from both Salesforce and Slack would not comment on the matter.

Should it go through, the Slack acquisition would be the latest in a number of multibillion-dollar Salesforce deals to snap up major players in the software industry. Last year it announced the purchase of data visualisation firm Tableau in a $15.7bn deal, which followed the 2018 acquisition of MuleSoft in $6.5bn.

A ‘game-changer move’

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The acquisition of Slack would increase competition between Salesforce and Microsoft in the software provider space. Both Slack and Microsoft remain in a legal battle after the former accused Microsoft of being engaged in an “illegal and anti-competitive practice” by offering rival productivity app, Teams, with its Office 365 enterprise suite in a way that is designed to eliminate rivals.

However, the rivalry between Salesforce and Microsoft has been in place for a number of years now, with both tech giants often attempting to buy the same companies. Both had made bids for the business social network LinkedIn, with Microsoft coming out on top with an offer of more than $26bn.

Despite its current rivalry, it was previously reported in 2016 that Microsoft had attempted to purchase Slack in a deal worth around $8bn, but it never materialised. The following year, it announced the launch of its Teams product and Slack now openly calls Microsoft its biggest competitor.

Speaking to CNBC, Dan Ives of Wedbush Securities said Salesforce closing a deal to acquire Slack would be a “game-changer move … to further build out its collaboration engine and product footprint as cloud spending ramps across the enterprise”.

Colm Gorey was a senior journalist with Silicon Republic

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