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Slack, Salesforce Merger Nears Closure After DoJ Drops Antitrust Review

The $27.7 billion merger between Salesforce and Slack is set to close on July 21.

Slack Technologies  (WORK) - Get Report shares edged higher in active trading Monday after an antitrust probe into its $27.7 billion takeover by Salesforce  (CRM) - Get Report was dropped by the Department of Justice.

The DoJ's Antitrust Division opened a "second request" review into the deal earlier this year as the new administration of President Joe Biden vowed to take a closer look at big tech mergers. Slack said in a Securities and Exchange Commission filing that it expects the deal to close on July 21.

Slack shares were marked 0.92% higher in early Monday trading to change hands at $45.11. Salesforce shares, meanwhile, fell 04.% to $237.50 each. 

Last month, Slack said its fiscal first quarter revenues rose 36% from last year to $273.4 million, with billings rising 35% to $278.5 million. Paid customer growth, the company said, was up 39% to 169,000.

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Salesforce, which published quarterly earnings on May 27, boosted its full-year outlook to an adjusted profit between $3.79 and $3.81 per share and forecast revenues in the range of $25.90 billion and $26.00 billion.

"Considering the deal price and the presence of a robust competitor in the collaboration market in the form of Microsoft, we expect investors to be keyed in on the early success Salesforce has in driving Slack penetration within its existing customer accounts," said Stifel analyst Tom Roderick who carries a 'buy' rating with a $295 price target for Salesforce stock.

"Unlike other large-scale deals we've seen from Salesforce over the last decade, investors appear to have taken a more skeptical stance on the fit of Slack within the Salesforce ecosystem," he added. "Considering that many organizations still rely on phone calls and email as their primary forms of employee collaboration, we see potential for Salesforce and Slack to play a role in the transformation of internal communications."