Ericsson’s $6.2 billion Vonage takeover gets U.S. clearance
2:02 am Friday, July 15th, 2022
COPENHAGEN/STOCKHOLM (Reuters) -Telecom firm Ericsson has received clearance from the U.S. national security panel to complete a $6.2-billion acquisition of cloud communications firm Vonage, the Swedish company said on Friday.
In the largest acquisition in its history, Ericsson agreed to buy Vonage in November, seeking to diversify revenue streams and protect itself against the cyclical nature of wireless mobile spending.
However, last month it said the closing of the acquisition was delayed to the end of July from the first half of the year, due to a pending investigation by the Committee on Foreign Investment in the United States (CFIUS).
After announcing the deal, Ericsson was embroiled in a scandal in February about payments to the Islamic State militant group in Iraq, triggering investigations by different U.S. agencies that fuelled concern its deal could be at risk.
Vonage shares closed at $19.65 on the Nasdaq on Thursday, compared to Ericsson’s offer price of $21 a share. Shares of Ericsson have lost a third of their value this year.
(Reporting by Stine Jacobsen and Supantha Mukherjee; Editing by Essi Lehto and Clarence Fernandez)
