“Zoom” failed to acquire the cloud communication software company “Five 9”, Thursday, due to the lack of sufficient approval votes from the shareholders of the second company, according to the newspaper “The Wall Street Journal”.
Five9 issued a statement saying that the deal failed to obtain sufficient votes from its shareholders and that the merger plan was “terminated by mutual agreement” with Zoom.
The rejected $15 billion offer comes after Five 5’s institutional shareholder services recommended a vote against the acquisition, highlighting concerns about slowing Zoom growth, at a time when life is beginning to return to normal through in-person meetings following the pandemic. .
Zoom provides video calling and online chat services through its electronic platform, as well as video communication software used in conferences, meetings, education and remote social relations.
Zoom was one of the biggest beneficiaries of the shift to virtual work and distance education, as the value of the company’s shares rose after widespread closures in the United States and the world last year due to the repercussions of the pandemic. Zoom was taking advantage of its strong share price in order to acquire Five 9.
Earlier last month, a committee led by the US Department of Justice launched an investigation into Zoom’s acquisition of the software company Five 9 due to “national security” concerns over its ties to China.
Reviewing the $15 billion deal .. “Zoom” is in the crosshairs of an American investigation
A panel led by the US Department of Justice is investigating Zoom’s acquisition of software company Five 9 due to “national security” concerns over its ties to China, according to the Wall Street Journal.
The Justice Department said Team Telecom will review the company’s license application to the FCC to see if the deal, estimated to be worth about $15 billion, involves “risks to the national security or law enforcement interests of the United States,” according to a published letter. on the FCC website.
And “Zoom”, which is based in California, is a subject of American interest because of China, and the Department of Justice accused, last year, an executive in the company of conspiring to disrupt video celebrations to commemorate the “Tiananmen Square” protests.
The company also faces several other federal investigations related to its dealings with Beijing.
Zoom CEO Eric Yuan said in a statement that while the company was looking forward to the potential partnership, “financial discipline is the foundation of our strategy.” He said Zoom remains focused on increasing value for shareholders and customers.
Zoom’s stock remained stable after the deal failed, at about $262 per share. On the other hand, the value of “Five 9” shares decreased by more than 1 percent in post-closing trading.