Salesforce to buy workplace app Slack for about $26 billion

(Reuters) – Salesforce.com Inc (NYSE:CRM) agreed to buy workplace messaging app Slack Technologies Inc for about $26 billion in its biggest deal, as the cloud-computing pioneer bolsters its remote-work offerings and takes on larger rival Microsoft Corp (NASDAQ:MSFT).

Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, or $45.5 per share based on Salesforce’s closing price on Tuesday.

The offer represents a premium of 54% since the first report emerged last week about the deal talks.

Slack shares fell marginally to $43.7 in extended trading on Tuesday, while Salesforce’s stock declined nearly 4%.

The bid comes as Slack struggles to fully capitalize on the switch to remote working during the COVID-19 pandemic in the face of fierce competition from Microsoft’s Teams and other workplace apps.

The deal is expected to close in the second quarter of Salesforce’s fiscal year 2022.

Salesforce also reported third-quarter revenue of $5.42 billion on Tuesday, beating analysts’ estimate of $5.25 billion, according to IBES data from Refinitiv.