Rod Sims (ACCC)
The Australian Competition and Consumer Commission (ACCC) has decided not to oppose Salesforce’s proposed US$27.7 billion acquisition of Slack, citing minimal direct competitive overlap.
According to the Australian competition watchdog’s chair, Rod Sims, both the customer relationship management (CRM) software vendor and the enterprise collaboration platform provider mostly supply different software with distinct purposes.
Focusing on whether Salesforce having both CRM and team collaboration solutions could lead to a lessening of competition, the ACCC came to the conclusion that it was unlikely the acquisition would result in Salesforce stopping Slack’s rivals in team collaboration solutions from competing effectively.
The watchdog also considered it unlikely that Salesforce’s CRM rivals will be competitively disadvantaged.
“Most interested parties raised no concerns. Market participants said that if Salesforce engaged in anti-competitive bundling or foreclosure conduct, customers could switch to alternative CRM solutions, including global enterprise software companies such as Microsoft, Oracle, SAP and Adobe," Sims said.
“Similarly, customers could switch to alternative team collaboration solutions, such as Microsoft Teams.
“We consider, due to commercial and reputational risks, that Salesforce would be unlikely to disadvantage competitors by degrading interoperability between Salesforce’s CRM solution and competitors’ team collaboration solutions, or between Slack’s team collaboration solution and competitors’ CRM solutions.”
The ACCC’s stance follows Salesforce’s confirmation of its intentions to acquire Slack in December, which, if successful will see Slack shareholders receive US$26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share.
This represents an enterprise value of approximately US$27.7 billion based on the closing price of Salesforce’s common stock on 30 November, 2020.
The deal is subject to approval by Slack stockholders, the receipt of required regulatory approvals and other customary closing conditions, and is anticipated to close in the vendor’s second fiscal quarter of 2021.
