Salesforce Slack Deal: DOJ Requests Extra Info
Katie Kramer | CNBC
The Justice Department’s antitrust division has asked Salesforce and Slack for more information before Salesforce plans to buy the smaller software company for $ 27 billion, Salesforce said Tuesday.
The development could point to a closer examination of important technology transactions under the Biden administration.
Despite the additional tier of ratings, Salesforce expects the deal for Slack to close in the quarter ended July 31, according to a regulatory filing.
The review known as the Second Inquiry is not unprecedented: GE’s 2017 acquisition of Baker Hughes, Charles Schwab’s TD Ameritrade deal for 2020, and Anheuser-Busch’s 2020 deal with Craft Brew Alliance that completed the sale Kona Brewing’s Hawaiian operations to another company faced similar inquiries.
There are signs that the US may take a stronger approach to antitrust enforcement than it did under Barack Obama, CNBC reported in January. In Congress, Amy Klobuchar, a Minnesota Democrat who became chair of the Senate Antitrust Subcommittee this month, proposed a major antitrust enforcement reform.
“We have appreciated our constructive dialogue with the Justice Department and look forward to continuing it,” a Salesforce spokesman told CNBC in an email. “We firmly believe that this transaction will be transformative for customers and the industry, and will enable companies to grow and thrive in this fully digital world where people work from anywhere.”
The proposed deal, which would be Salesforce’s biggest yet, would bring together two companies both trying to challenge Microsoft, the world’s largest software company.
Slack has become a trendy tool in recent years that colleagues can use to chat with one another. While the company’s product became more widely used during the coronavirus pandemic, Microsoft gets the competing team app that companies get when they pay for subscriptions to Office 365 productivity software has shown more visible growth. In July, Slack announced it had filed an antitrust complaint against Microsoft with the European Commission.
“We are excited to work with regulators to ensure they fully understand this transaction and why we believe it is good for competition,” said Jonathan Prince, vice president of communications and policy for Slack, in a statement. “We are confident that it will be approved when this process is complete. Most importantly, we want to underline that our entire business is based on Open Access. We want our customers to have the flexibility to make the best decisions for their teams, and We aim to remain software agnostics to ensure just that. ”
Correction: An earlier version of this story contained a bullet point that incorrectly identified the company that filed an antitrust lawsuit against Microsoft. It was Slack, as correctly stated in the main part of the story.
SEE: Stewart Butterfield, CEO of Slack, on Salesforce deal: “We have a lot of momentum now”