Salesforce plans to buy Slack: report

[NEW YORK] US software firm Salesforce plans to buy corporate messaging platform Slack, the Wall Street Journal reported on Wednesday, leading to a jump in stock prices for the young company.

Slack, which has enjoyed increased popularity since the beginning of the coronavirus pandemic, saw its shares surge 32 per cent.

Trade was temporarily suspended but prices were still up nearly 24 per cent around 1.00pm (1800 GMT).

Salesforce - which specialises in technology that allows businesses to communicate with clients - fell nearly three per cent, however.

The two companies have begun merger discussions for an agreement that could see Slack valued at more than the present market capitalization of US$17 billion, the Journal reported.

"If Salesforce does head down this path it would set off a chain reaction for more cloud software deals in 2021," Wedbush analyst Dan Ives said.

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It could pave the way for more mergers in the cloud tech sector, Ives said, especially since the move could set up Salesforce as a competitor for Microsoft, which owns Slack rival Teams.

Salesforce acquired data software company MuleSoft in 2018 for around US$6.5 million and data visualisation tool Tableau for US$15.7 in 2019.

Slack, which purports to make it easier for teams of employees to collaborate online, has boomed as remote working has gained a cultural foothold during the Covid-19 pandemic.

In its latest quarterly report, the company declared a 49 per cent increase in revenue for May, June and July, to US$216 million. The platform counts 130,000 paying clients.

AFP