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Ericsson To Acquire Cloud Firm Vonage For $6.2 Billion

On Monday, telecommunications company Ericsson said it had agreed to acquire cloud communications firm Vonage for $6.2 billion.

Posted: 22nd November 2021 by
Finance Monthly
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The deal between the firms follows Ericsson's acquisition of wireless networking company Cradlepoint for $1.1 billion in 2020. However, this latest deal marks Ericsson’s largest in many years. 

In a statement, Ericsson said, “The merger agreement was approved unanimously by the Board of Vonage. 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.” 

In the statement, President and CEO of Ericsson Börje Ekholm also 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 deal with Vonage, which had sales of $1.4 billion in the 12 months to September 30 2021, marks a new phase since Ekholm took over as company CEO in 2017. 

Ekholm has focused on restructuring Ericsson following the firm’s decision to branch out into multi-media in the early 2000s, which proved a struggle for the company as it grappled to fit its purchases into its operations. 

The deal will close in the first half of 2022, subject to approval by Vonage shareholders, regulatory approvals, and other conditions. Eccrison expects the deal to boost earnings per share and free up cash flow in the coming years. 

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