Salesforce's acquisition of Slack

Salesforce's acquisition of Slack
Name	Salesforce acquisition of Slack
Date announced	December 1, 2020
Date closed	July 21, 2021
Acquiring company	Salesforce
Acquired company	Slack Technologies
Value	US$27.7 billion

Salesforce's acquisition of Slack Salesforce, a leading Salesforce cloud computing company, acquired Slack Technologies, a prominent provider of workplace collaboration software, in a deal announced on December 1, 2020 and closed on July 21, 2021. The transaction brought together two notable Silicon Valley firms—Salesforce and Slack—reshaping relationships among cloud platforms, enterprise software providers, and collaboration services such as Microsoft, Google, Amazon Web Services, and Oracle. The deal immediately drew attention from investors, regulators, and enterprise customers including IBM, Accenture, Deloitte, and PwC.

Background

Slack Technologies originated from the company Tiny Speck, founded by Stewart Butterfield, who previously co-founded Flickr and engaged with projects linked to Yahoo!. Slack's rapid adoption by businesses and organizations such as Airbnb, Target Corporation, Rackspace, and Lyft positioned it as a competitor to collaboration offerings from Microsoft Teams, Google Workspace, and Zoom Video Communications. Salesforce, led by CEO Marc Benioff, expanded through acquisitions including ExactTarget, Tableau Software, MuleSoft, and Heroku to build a comprehensive customer relationship management stack. The cloud era also featured major transactions like Microsoft Corporation’s acquisition of LinkedIn, Oracle Corporation’s purchases, and strategic moves by Adobe Inc. and SAP SE.

Acquisition details

Salesforce announced it would acquire Slack for approximately US$27.7 billion in cash and stock consideration, structuring the deal amid prior large technology acquisitions such as Facebook’s purchase of WhatsApp, Alphabet Inc.’s acquisition of YouTube, and IBM Corporation’s transaction history. Slack shareholders received $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share. The closing involved approvals from boards of directors including Slack’s board chaired by Cal Henderson and Salesforce’s board under Mark Hawkins and was executed following governance processes similar to those in deals like Broadcom’s acquisitions.

Strategic rationale

Salesforce positioned the acquisition as a way to create an "enterprise operating system" for digital-first companies, integrating Slack with Salesforce’s Sales Cloud, Service Cloud, Marketing Cloud, and Commerce Cloud. Executives cited synergies with middleware and integration plays from MuleSoft and analytics capabilities from Tableau Software to enable workflows across Workday, ServiceNow, and SAP SE deployments. The move was framed in the context of remote work trends driven by the COVID-19 pandemic and competition with collaboration leaders such as Microsoft and Google. Analysts compared strategic intent to prior aggregation strategies by Cisco Systems and VMware.

Regulatory review and approvals

Regulators across jurisdictions evaluated antitrust implications, including the United States Department of Justice, the European Commission, the UK Competition and Markets Authority, and the Australian Competition and Consumer Commission. Reviews considered market overlap with Microsoft Teams and potential effects on customers like Apple Inc. and Samsung Electronics. The deal cleared after no major remedies were required, echoing procedures seen in approvals for transactions involving Intel Corporation, AMD, and NVIDIA Corporation in other contexts.

Financial terms and shareholder response

The US$27.7 billion valuation reflected Slack’s 2019 initial public offering via a direct listing on the New York Stock Exchange. Investors including institutional holders such as Vanguard Group, BlackRock, Fidelity Investments, and activist entities assessed the premium relative to Slack’s market capitalization. Market reaction echoed earlier responses to high-profile tech combinations like Amazon’s investments and Microsoft’s LinkedIn deal, with Salesforce shares and Slack ADRs moving amid commentary from analysts at Goldman Sachs, Morgan Stanley, and JPMorgan Chase.

Integration and restructuring

Post-closing, Salesforce initiated integration of Slack into its organizational structure, appointing Slack CEO Stewart Butterfield to a leadership role reporting to Marc Benioff, while making organizational moves comparable to integrations after the Tableau Software and MuleSoft acquisitions. Integration addressed engineering alignment with Heroku teams, product roadmaps intersecting with Salesforce Einstein AI initiatives, and go-to-market coordination with partners like Accenture, Deloitte, Capgemini, and Infosys. Workforce adjustments and role realignments prompted comparisons to past restructurings at Microsoft, Google, and Oracle.

Market impact and competitors

The acquisition intensified competition among enterprise collaboration and productivity vendors including Microsoft Corporation, Alphabet Inc., Zoom Video Communications, Atlassian Corporation, Cisco Systems, Slack Technologies’s prior competitors, and open-source projects associated with Linux Foundation initiatives. Corporate customers evaluated multicloud strategies involving Amazon Web Services, Microsoft Azure, and Google Cloud Platform, while independent software vendors and app ecosystem players such as Okta, Dropbox, Box, and Zendesk adjusted integrations and partnerships.

Legacy and long-term outcomes

Long-term outcomes include deeper integration of Slack into Salesforce’s platform, influencing CRM workflows and competitive positioning against suites from Microsoft, SAP SE, and Oracle Corporation. The acquisition is referenced alongside landmark tech mergers like Facebook–Instagram, Google–DoubleClick, and Microsoft–LinkedIn as shaping enterprise software consolidation. Subsequent evaluations by analysts at Forrester Research, Gartner, IDC, and McKinsey & Company consider the deal in studies of cloud consolidation, SaaS economics, and platform competition among major vendors including Salesforce, Microsoft, Google, and Amazon.

Category:Salesforce Category:Slack Category:2021 mergers and acquisitions