Zoom cancels $14.7bn Five9 takeover
The video conferencing giant said the contact centre market still ‘remains a strategic priority’
Zoom has announced its $14.7bn acquisition of Five9 has been mutually terminated.
At Five9's special meeting of stockholders held yesterday (30 September), the cloud-based call centre operator did not obtain the requisite stockholder support for the merger agreement.
As a result, Zoom and Five9 each had the ability to terminate the merger agreement.
"While we were excited about the benefits this transaction would bring to both Zoom and Five9 stakeholders, including the long-term potential for both sets of shareholders, financial discipline is foundational to our strategy," said Zoom founder and CEO, Eric S. Yuan.
"The contact centre market remains a strategic priority for Zoom, and we are confident in our ability to capture its growth potential."
The collapse of the deal follows the US government's investigation into Zoom's bid after concerns were raised around the acquisition's potential risk to the national security or law enforcement interests of the United States.
The Committee for the Assessment of Foreign Participation in the United States Telecommunications Service Sector was requested to review the buy on behalf of the US Department of Justice.
The deal was marred by further controversy following reports from The Wall Street Journal, which claimed the investigation was triggered by the videoconferencing giant's links with China.
Zoom's initial buy of Five9 was first reported in July.
Then last week, CPI reported Five9's shareholders were advised to vote against Zoom's multi-billion dollar deal by proxy advisory firm Institutional Shareholder Services, citing stock concerns.
It said, following the announcement of the buy, shares in Zoom dropped by more than 20 per cent, with Five9 also seeing a decline by five per cent.
Zoom's CEO went on to explain the company's plan to continue its pursuit of the contact centre market with the creation of its Zoom Video Engagement Center, a cloud-based contact centre solution set to launch early 2022.
"We believe that the opportunities for Five9 to continue to create value for shareholders on a standalone basis are significant," said Allison Wilson, director, corporate communications at Five9.
"Over the past few months, we have continued to execute relentlessly in the market.
"By continuing to focus on our growth pillars of product innovation, excellence in go-to-market execution, and growth in the enterprise market, we are confident we will build on the current proven momentum."