Ericsson receives clearance to complete Vonage buyout
Ericsson has received clearance from the Committee on Foreign Investments in the US (CFIUS) to complete its acquisition of Vonage Holdings.
It was announced last month that the US$6.2 billion deal was on hold, pending an investigation by CFIUS as it reviewed the details of the acquisition.
The deal, which was initially agreed in November, faced uncertainty as Ericsson faced a bribing scandal related to its activities in Iraq.
This led to the US Department of Justice (DoJ) opening an investigation against the company. Ericsson reportedly paid penalties of over US$1 billion because of admitted misconduct in China, Djibouti, Kuwait and Vietnam.
However, the clearance represents the “final requisite approval” to complete the deal, Ericsson says.
Vonage was formed in 2001 as a VoIP provider for customers before growing into a cloud communications provider.
According to Ericsson, the deal will give it access to more than one million developers and a foot into an enterprise market expected to reach US$700 billion by 2030.
The Swedish kit vendor says the parties now expect the merger to close no later than July 21, 2022, as provided for in the merger agreement.
The company’s sales were up 14% in the second quarter of this year, reporting an increase of 8%.
It also warned its shareholders to be prepared for penalties following the news that it would be investigated for its alleged corruption.