Ericsson has secured clearance from the US national security panel to complete its $6.2 billion acquisition of New Jersey-based cloud communications firm, Vonage.
Ericsson first announced its intent to acquire Vonage in November 2021. The acquisition was scheduled to close by the first quarter of the current fiscal year.
“The transaction builds upon Ericsson’s stated intent to expand globally in wireless enterprise, offering existing customers an increased share of a market valued at USD 700 billion by 2030,” the company reported in November.
However, the buyout fell behind schedule after the 5G infrastructure provider got bogged down by a scandal over suspicious payments to an Islamic militant group in Iraq. The allegation sparked an investigation from numerous US agencies, shelving Ericsson’s deal with Vonage.
Preliminary inquiry revealed the firm “sought permission from the terrorist group known as the Islamic State to work in an ISIS-controlled city and paid to smuggle equipment into ISIS areas on a route known as the ‘Speedway’,” according to a leaked internal investigation report obtained by the International Consortium of Investigative Journalists.
A massive $1 billion fine was paid by Ericsson for its corporate fraud, to avoid prosecution by the US Department of Justice.
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With no criminal and civil penalties pending, the Committee on Foreign Investment in the United States (CFIUS), today, gave its approval to Ericsson’s outstanding deal with Vonage. The regulatory consent marks the final requisite approval for Ericsson’s Vonage buyout. The acquisition is, by far, the largest in the firm’s history.
“The parties now expect the Merger to close no later than July 21, 2022, as provided for in the Merger Agreement,” Ericsson said in a statement.
