Salesforce buys Slack for $27.7 billion

The deal is Salesforce’s biggest acquisition to date.

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Messaging app Slack will be acquired by Salesforce for $27.7 billion in what will be the software company’s biggest acquisition to date. The deal is expected to complete during the second quarter of 2021, following regulatory approval and the usual round of box-ticking.

Under the new arrangement, Slack founder and CEO Stewart Butterfield will continue to lead the messaging service, which will become an operating unit within Salesforce, the companies said. In a statement, Salesforce said that Slack would be “deeply integrated into every Salesforce Cloud,” and that Slack “would become the new interface for Salesforce Customer 360,” the company’s customer management platform.

If you’re unfamiliar, Salesforce — founded by Marc Benioff — provides sales management software and other cloud services to businesses. It has seen record growth through 2020 as it helps businesses affected by COVID-19 transition to the cloud. The Financial Times says that it has been looking for a customer-facing product for some time as it looks to bolster its product against Microsoft, which itself has a thriving cloud services business. The deal marks the company’s largest, and most ambitious, acquisition to date. Slack’s $27.7 billion price tag is nearly double what it paid for analytics company Tableau, which it bought for $15.7 billion last year.

Slack, meanwhile, has become shorthand for a real-time messaging service that has been embraced by companies who have no idea what IRC is. Its business has, however, suffered a little through 2020, in part because Microsoft’s Teams has been adapted to offer a competing product. Teams is sufficiently contentious that Slack has filed a lawsuit against the software giant in the EU.

Daniel Cooper contributed to this report.

Update 12/1 2:52pm PT: In a message to employees, Butterfield said that joining with Salesforce would be “transformative” for both companies, and that Slack would retain its identity as part of Salesforce. “Our mission, vision, objectives, priorities, values and ambitions remain the same,” he wrote. “We’re not changing our roadmap, or our brand, or the way we do business.”