Salesforce to acquire Slack in a $27.7 billion deal

It's official: Salesforce has unveiled plans to acquire Slack in a $27.7 billion deal.

The company on Tuesday announced the Slack acquisition, the biggest deal since Salesforce's founding, The New York Times reported. The news came after The Wall Street Journal reported that the deal for the software company was in advanced discussions.

Salesforce CEO Marc Benioff described the purchase of Slack as "a match made in heaven," while Slack CEO Stewart Butterfield called this the "most strategic combination in the history of software."

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Salesforce's acquisition of Slack will still need to receive approval from regulators and Slack shareholders, the Journal notes. But should it go through, the Journal writes that it would "turn the combined company into one of the biggest players in the competitive business-software market." Slack has said there has been a "significant increase in demand and usage" due to increased working from home during the COVID-19 pandemic, and in the three months that ended in October, its revenue rose 39 percent, the Times reports.

But analysts note this deal comes as Slack "faces heavy competition from Microsoft's Teams product," The Washington Post reports.

"When you're a scrappy start-up going against an 800-pound gorilla that's one of the most well-capitalized companies in existence, it's tough to compete," analyst Logan Purk told the Times. "This is more or less saying, 'We can't compete with Microsoft Teams anymore. We need more firepower.'"