Deals

Salesforce's Hefty Price Tag Means Profit Penalty for Buyers

Is an acquisition worth the financial hit?

A DreamForce attendee listens to Marc Benioff, chairman and chief executive officer of SalesForce.com, as he delivers the keynote speech during DreamForce 2011 in San Francisco, California, U.S., on Wednesday, Aug 31, 2011.
Photographer: David Paul Morris/Bloomberg

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By Tara Lachapelle and Cory Johnson

May 6, 2015 at 5:34 PM UTC

This article is for subscribers only.

Acquiring Salesforce.com Inc. wouldn't just cost a fortune — it also would dent the profits of any buyer.

A takeover of the $49 billion software provider would damage earnings for companies from Microsoft Corp. to Oracle Corp. and International Business Machines Corp. that are among possible suitors. Earnings at these technology giants could take a hit of as much as 18 percent, according to data compiled by Bloomberg. That would mean needing to slash about $3 billion of costs just to offset the decline and break even on the deal.