Salesforce has agreed to buy workplace messaging app Slack for $27.7bn (£20bn) in what would be one of the biggest tech mergers in recent years.
Marc Benioff, boss of the business software giant, called the deal a “match made in heaven”.
He has been pushing to expand the company’s software offerings and fend off rivals such as Microsoft.
The acquisition comes as the pandemic has increased the focus on remote work and tools, like Slack, which enable it.
Tech analyst Dan Ives of Wedbush Securities called it a “now or never” purchase for Mr Benioff.
“If Salesforce wants to expand beyond its core gold mine of sales and marketing departments … this was the moment and thus represents a major shot across the bow against Microsoft,” he wrote in a note to investors after the deal was announced.
Slack, founded in 2009, has won a following with its group chats, which offer an alternative to email.
When it listed its shares publicly in 2019, it was valued at roughly $20bn.
However, its shares sank after the launch and have missed out on the stratospheric rise enjoyed by other tech firms this year.
The company, which had about 12.5 million users as of late March, has had difficulty making inroads against Microsoft Teams, a similar product that the tech giant unveiled in 2016 and now has more than 100 million users.
This summer, Slack brought a competition complaint against Microsoft in the European Union, saying the firm was abusing its market dominance by bundling Teams into its other products.
Under the terms of the Salesforce deal, Slack shareholders are to receive $26.79 in cash – roughly what they were worth at the beginning of November, before rumours of the acquisition pushed the price per share to more than $43 as of Tuesday. They will also receive some stake in Salesforce.
The deal, which will be reviewed by Slack shareholders, is expected to close next year.