Salesforce and Microsoft engaged in significant discussions last spring, but the companies failed to agree on the acquisition price, according to report from CNBC based on information from people with knowledge about the situation.
The report indicated that Microsoft is willing to acquire Salesforce for around $55 billion. Salesforce founder and CEO Marc Benioff wanted a higher offer, around $70 billion.
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The sources said the discussions between Microsoft and Salesforce advanced to a level that showed seriousness from both sides even if they failed to reach a deal. The companies haven’t re-engaged since the talks concluded early in May.
Microsoft CEO Satya Nadella was hesitant to a certain extent in pursuing a transaction of such size and consequence for the company, according to the report.
Last month Bloomberg that a potential buyer approached Salesforce, which ignited speculations that Amazon.com, International Business Machines, Microsoft, SAP, and Oracle Corporation may be interested in acquiring the company.
Salesforce is the golden jewel in the cloud
FBR Capital Markets analyst Dan Ives told Reuters that Salesforce is “golden jewel in the cloud” due to its “leadership position, stellar brand, and distribution. According to him, Salesforce fit well within the ecosystem of Microsoft.
Salesforce is the leader in the global customer relationship management (CRM) market. According to Gartner, the CRM market is worth $23 billion annually.
Faber added that any potential bidder could offer as much as $70 billion for Salesforce. According to him, the most likely bidders for Salesforce include Amazon.com, Microsoft, and Oracle.
On Wednesday, SAP Chief Executive Bill McDermott said his company will not buy Salesforce. He also commented that it is unlikely that Salesforce will be acquired by another player in the industry.
Reuters recently reported that currently, Microsoft is not considering a proposal to acquire Salesforce based on information from two people familiar with the matter.
Since the acquisition speculations, the stock price of Salesforce.com surged. Yesterday alone, the shares of the company increased 4%. The stock is trading higher again today, up by 2.5% to $74.75 per share around 3:41 in the afternoon in New York. The company gained more than 24% year-to-date.
Salesforce posted non-GAAP earnings of $0.16 per share on $1.51 billion in revenue, up 23% for the first quarter.