Ericsson has completed its $6.2 billion acquisition of cloud communications provider Vonage after overcoming significant regulatory hurdles.
The Swedish vendor first announced its largest-ever acquisition in November of last year.
Börje Ekholm, President and CEO of Ericsson, said: “The core of our strategy is to build leading mobile networks through technology leadership. This provides the foundation to build an enterprise business. The acquisition of Vonage is the next step in delivering on that strategic priority. Vonage gives us a platform to help our customers monetise their investments in the network, benefitting developers and businesses.
“Imagine putting the power and capabilities of 5G, the biggest global innovation platform, at the fingertips of developers. Then back it with Vonage’s advanced capabilities, in a world of eight billion connected devices.”
Large transactions like this typically attract regulatory scrutiny, and Ericsson’s deal faced extra examination after the company disclosed corruption-related misconduct by some representatives involved in its Iraq operations.
In February, Ericsson acknowledged it had uncovered evidence of “corruption-related misconduct” in Iraq and said it could not rule out that payments were made to terror groups, including ISIS. This followed an earlier probe that resulted in a more than $1 billion settlement in 2019, when an Ericsson unit admitted to a long-running campaign of corrupt practices in multiple countries across Asia and the Middle East.
Given that history, U.S. regulators took additional time to review Ericsson’s acquisition of Vonage before granting approval.
Last week, Ericsson received regulatory clearance from U.S. authorities to proceed with the acquisition.
Rory Read, CEO of Vonage, commented: “Vonage was born out of innovation and is today a global leader in business cloud communications. This partnership will strengthen our offerings to businesses across the globe by leveraging Ericsson’s leadership in 5G, global market presence and strong R&D capabilities. With the demand for UCaaS, CCaaS and Communications APIs growing rapidly, the combined expertise, talent and innovation is good news for our customers and partners.
“The way we work, shop, learn, see a doctor, exercise, and entertain is fundamentally changing. Together, Ericsson and Vonage will be at the heart of the next wave of digital transformation, providing enterprises, communications service providers, and end users with innovative applications and services that will change how business gets done.”
(Photo by Eduard Labár on Unsplash)
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