Cloud-based software company Salesforce.com is in talks to acquire workplace messaging app Slack Technologies as it seeks to expand its offerings to businesses, people familiar with the matter have said.
Salesforce's bid comes as Slack struggles to fully capitalise 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.
Salesforce sees the potential acquisition as a logical extension of its enterprise offerings, the sources said.
The price it was offering for Slack is not known, though one of the sources said Salesforce would pay cash for the deal, rather than use its stock as currency.
If the negotiations conclude successfully, a deal could be announced before Slack reports quarterly earnings on December 9, one of the sources added.
Slack has benefited from companies relying more on information technology systems to keep their workers connected during the pandemic.
Its app has been installed about 12.6 million times so far this year, up about 50% from the same time in 2019, according to analytics firm Sensor Tower.
But the economic fallout of the virus outbreak has forced Slack to give discount and payment concessions to many of its customers who have had to make cost cuts.
Seeking to save money, some companies have also been switching to Teams, which comes with many of Microsoft's office software packages.
Slack's billing growth, a key indicator of future revenue, slowed in the three months to the end of July.
Salesforce meanwhile has been thriving financially during the pandemic.
It raised its annual revenue forecast in August as the pandemic spurred demand for its online business software that supports remote work and commerce.
Salesforce has been beefing up its cloud business through acquisitions and had spent more than $16 billion last year to fend off competition from rivals such as Oracle and German competitor SAP.