According to a new report in the Wall Street Journal, Salesforce has been in talks to purchase the Slack workplace messaging app.
According to the report, there is no guarantee that preliminary negotiations will lead to an acquisition, but the agreement would signal a more aggressive involvement of the cloud giant in office communications. Currently, Salesforce has two communication and collaboration tools, Chatter and Quip, that can be used in parallel with its customer management-centric tools.
This move would represent the largest acquisition in Salesforce’s history, as Slack’s market capitalization prior to the report was approximately $ 17 billion and the acquisition price is likely to be higher. Slack’s stock rose 32% on the news, while Salesforce shares fell about 3.5%. None of the companies was immediately available for comment.
This would also continue the late acquisition of Salesforce. The client management software provider has made two major acquisitions in recent years: in 2019, it acquired the data display company Tableau for more than $ 15 billion, and in 2018 for $ 6.5 billion.
In the company’s most recent August quarterly earnings call, CEO Marc Benioff said he “really didn’t see an M&A environment” like large corporations like him. He also said Salesforce will focus on integrating the acquisitions of MuleSoft and Tableau this year.
However, Salesforce has made some minor acquisitions so far in 2020, acquiring Vlocity for $ 1.3 billion in February and The CMO Club marketing network for an unpublished amount in early March.
Analysts recently speculated that Salesforce may need acquisitions to maintain rapid growth, a UBS analyst said the company suffered from a “lack of innovation.”
Salesforce and Slack have been in an existing partnership since 2016, and last year expanded it to allow users to move seamlessly between both cloud services.
Both companies compete with Microsoft, Salesforce with Microsoft’s customer relationship management tools, and Slack with Microsoft Teams, its chat and collaboration application. The merger could potentially place both companies as stronger competitors for Microsoft.