Salesforce Agrees to Buy Braze for $5.66 Billion in Cash, Paying a 58% Premium to Strengthen Its AI Marketing Push

Salesforce has struck another major acquisition in its race to reinvent itself for the age of artificial intelligence. The world's largest customer relationship management software company agreed on Tuesday, October 20, to buy Braze, a customer engagement platform, for about $5.66 billion in cash, Reuters reported.

Salesforce will pay $47.50 per Braze share, a premium of about 58.1% to Braze's last closing price. Braze shares jumped more than 50% on the news.

The deal is expected to close in Salesforce's fiscal year 2028 and is not expected to change the company's forecast for fiscal 2027. J.P. Morgan Securities is advising Salesforce, while Qatalyst Partners is advising Braze.

What Braze does

Braze helps companies communicate with their customers across channels such as mobile push notifications, email, SMS and in-app messages, using data about customer behaviour to personalise messages in real time. Its platform serves about 2,770 customers, including design platform Canva, grocery delivery company Instacart and payments app Venmo.

The company has built AI tools that help marketers decide which content, offers and channels are most likely to engage each customer, and when to send them. For consumer-facing brands, especially mobile apps, timely and relevant messaging can make a significant difference to user retention and revenue.

Shay Boloor of Futurum Equities said Salesforce is buying "a real-time engagement layer that its marketing business has historically lacked."

Salesforce's AI transformation

The acquisition is the latest step in Salesforce's effort to accelerate its transition to AI. The company has been pushing AI agents, software that can carry out tasks such as answering customer queries, qualifying sales leads and running marketing campaigns, as the future of enterprise software.

Earlier this year, Salesforce agreed to buy AI agent platform Fin for $3.6 billion, and last year it struck an $8 billion deal for data management company Informatica, according to Reuters. Together, these acquisitions aim to give Salesforce the data, AI and engagement capabilities needed to compete in a rapidly changing market.

The push reflects investor concerns that AI could erode demand for traditional software. If AI agents can perform tasks that once required employees using software applications, companies may need fewer software licences, threatening the subscription model on which companies like Salesforce have built their businesses. Software stocks have been volatile as investors weigh which companies will benefit from AI and which will be disrupted.

By owning more of the data and engagement layer, Salesforce hopes to ensure that its platform remains central to how companies interact with customers, even as AI changes how that work is done.

Deal protections

The agreement includes termination fees on both sides. Salesforce would pay $300 million if the deal is abandoned under certain circumstances, while Braze would pay $191.4 million if it walks away, according to the terms.

The deal will require regulatory approvals and the approval of Braze shareholders. Given Salesforce's size and its existing marketing cloud business, antitrust regulators may examine the transaction, although the market for marketing technology remains crowded with competitors.

A crowded marketing technology market

Braze competes in a busy market that includes Adobe, Oracle, Twilio's Segment, HubSpot, Iterable and Klaviyo, as well as Salesforce's own Marketing Cloud. Consolidation has been a recurring theme as large software companies seek to offer comprehensive suites rather than individual tools.

For brands, the integration of engagement tools with customer data platforms and CRM systems promises a more unified view of each customer. For Salesforce, it creates opportunities to sell Braze to its existing customers and to integrate Braze's real-time capabilities with its AI agents.

Why investors care about the premium

A 58% premium is substantial, reflecting both Braze's strategic value and the decline in many software company valuations over the past few years. Many software companies that went public during the boom years have seen their shares fall as growth slowed and investors questioned the impact of AI on their businesses. That has made them more attractive targets for larger companies with strong balance sheets.

For Salesforce shareholders, the key question is whether the acquisitions will accelerate growth and justify their cost. Salesforce has faced pressure from activist investors in the past to improve profitability and be disciplined about mergers and acquisitions. It will need to show that Braze, Fin and Informatica can be integrated effectively and that the combined offering wins customers.

What it means for India

Salesforce has a large presence in India, with major engineering and operations centres in Hyderabad, Bengaluru and other cities, and India is one of its fastest-growing markets. Indian IT services companies such as Infosys, TCS, Wipro and others are major implementation partners for Salesforce products, helping clients deploy and customise its software.

Braze also has customers among Indian and India-focused consumer apps, which rely on personalised engagement to retain users in a highly competitive market. Integration with Salesforce could create new opportunities for Indian partners and for brands seeking to engage India's vast mobile-first consumer base.

The software consolidation wave

Salesforce's acquisition of Braze is part of a broader consolidation in enterprise software. Large software companies are buying specialised businesses to add capabilities, particularly in AI and data, and to offer customers integrated platforms. Higher interest rates and slower growth have also pressured valuations of smaller software companies, making them more attractive acquisition targets.

For customers, consolidation can bring the benefits of integration, but it can also reduce choice and raise concerns about pricing and lock-in.

What comes next

The transaction is expected to take time to close, with completion targeted in Salesforce's fiscal 2028. In the meantime, the two companies will operate independently.

For the enterprise software industry, the deal underscores how the AI era is driving consolidation, as large platforms race to assemble the data, engagement and automation capabilities they believe will define the next generation of business software. For Salesforce, it is another bet that owning more of the customer journey will keep it at the centre of how companies sell, market and serve. For Braze's customers, including many consumer brands with large operations in India, the immediate priority will be continuity of service and clarity on how the platform will be integrated with Salesforce's products. Salesforce has said it expects the deal to close after regulatory and shareholder approvals, and both companies will continue to operate independently until then.