Slack snapped up by Salesforce in £20.6bn bet on remote working

Cloud computing pioneer Salesforce has agreed a $27.7bn (£20.6bn) deal to buy Slack, the workplace messaging app that has enjoyed a near-doubling of its market value during the COVID-19 pandemic.

Salesforce.com described the acquisition as a “match made in heaven” as the addition of Slack enables the company to offer a unified platform for businesses to connect with staff and match rival Microsoft and its Teams product.

Slack has struggled to make the same headway, in a competitive market, during a coronavirus crisis to date that has forced the closure of offices as remote working takes the strain instead.

Bucharest, Romania - November 27, 2019: View of Microsoft Romania headquarters in City Gate Towers situated in Free Press Square, in Bucharest, Romania. (Bucharest, Romania - November 27, 2019: View of Microsoft Romania headquarters in City Gate Tower
Image: Microsoft is Slack’s largest competitor in the workplace messaging space

Microsoft, for example, has been able to capitalise on the shift through its existing corporate relationships and marketing budget.

It has also bundled Teams with many of its office software packages.

Under the deal, Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share.

That is $45.5 per share, based on Salesforce’s closing price on Tuesday, a premium of 54% since news of negotiations emerged a week ago.

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Slack shares are 95% up in the year to date but fell back slightly in after-hours dealing in New York.

Stewart Butterfield, Slack’s chief executive and co-founder, said the deal offered a “massive” opportunity.

Stewart Butterfield is the chief executive of Slack
Image: Stewart Butterfield is the chief executive of Slack

“As software plays a more and more critical role in the performance of every organisation, we share a vision of reduced complexity, increased power and flexibility, and ultimately a greater degree of alignment and organisational agility,” he told investors.

Marc Benioff, his counterpart at Salesforce, said: “Stewart and his team have built one of the most beloved platforms in enterprise software history, with an incredible ecosystem around it.

“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.

“I’m thrilled to welcome Slack to the Salesforce Ohana once the transaction closes.”

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