Salesforce is set to buy Slack for $27.7 billion to extend the rivalry with Microsoft

World's largest CRM company Salesforce has agreed to buy workplace communications startup Slack Technologies for $27.7 billion in cash and stock. The acquisition gives the corporate software giant a popular workplace-communications platform in one of the biggest technology deals of the year. The transaction is the company's largest-ever acquisition. It expects to close it by the end of July 2021, Salesforce said Tuesday in a statement.

In the last five years alone, Salesforce has bought 26 companies and Slack is the 27th in the basket for $27.7 billion. After it announced the acquisition. its stock went up by a record 29%. Currently, the boards of both companies approved the deal. Yet, if Slack backs out or Slack's directors change their recommendations, they will have to pay Salesforce $900 million to accept a “superior proposal,” according to a regulatory filing. Bank of America Corp. served as Salesforce’s financial adviser. Qatalyst Partners and Goldman Sachs Group Inc. advised Slack.

The acquisition poses a bigger competition to Microsoft

Software as a service has become an industry standard that has turned into a gold mine for longtime software makers. Microsoft for one has developed its own thriving online suite of services, Office 365. It includes a Teams chatting service whose many features are the same as Slack. In fact, for this, Slack in July filed a complaint in the EU. There, it accused Microsoft of illegally bundling Teams into Office 365. Thus, it blocked the removal of Teams, even if consumers preferred Slack.

Salesforce CEO Marc Benioff has acquired more than 60 companies in the past 21 years. He took the company for the early era CRM era to becoming a titan of cloud computing. The Slack deal would give Salesforce, the leader in programs to manage customer relationships, another angle of attack against Microsoft Corp, which has itself become a major force in internet-based computing.