Home5G & BeyondEricsson's Vonage deal delayed by US review

    Ericsson’s Vonage deal delayed by US review


    Iraq scandal has come back to haunt it

    Ericsson’s $6.2 billion acquisition of Vonage won’t be finalised until August, at best, because a US national security panel, has now set up an investigation. The Swedish comms equipment maker has revealed a snag has emerged after it agreed to buy cloud communications firm Vonage in all-cash deal in November. The purchase was art of a bid to complement its 5G portfolio.

    The complication was created by the revelations of shady business practices. Ericsson has faced a bribing scandal in Iraq that inspired the US Department of Justice and the Securities and Exchange Commission (SEC) to opening investigations against it.

    Deal blocker

    Several analysts say the probes could either delay getting approval for the deal from US. regulators or even derail it. The deal is currently under review by the Committee on Foreign Investment in the United States (CFIUS), an interagency panel that reviews foreign investments for potential national security risks.

    “Given that the committee’s review is ongoing, we cannot comment on any specifics,” said an Ericsson representative. Both companies were working closely with CFIUS, said Ericsson’s speaker, and the deal has cleared all other requisite foreign and US regulatory approval requirements. The deal is one of the largest in Ericsson’s history.