Ericsson said today that it received clearance from the Committee on Foreign Investments in the United States (CFIUS) to complete its $6.2 billion acquisition of Vonage Holdings.
The deal is now expected to close no later than next Thursday, July 21. A previous forecast had it closing at the end of July.
The acquisition of New Jersey-based Vonage is the Swedish vendor’s biggest acquisition to date. Vonage was founded in 2001 as a VoIP provider for consumers and grew into a cloud communications provider focused on businesses. In 2020, it reported revenues of $1.25 billion.
During Ericsson’s second-quarter earnings presentation on Thursday, CEO Borje Ekholm said the acquisition of Vonage is an important building block in Ericsson’s strategy, which includes developing a leading offering in the enterprise space.
The company formed a new segment, called Enterprise Wireless Solutions, which includes Cradlepoint and dedicated networks.
The infrastructure market continues to be the core of the company, Ekholm said, according to a Seeking Alpha earnings call transcript. It's going to make sure that it performs well there, he said.
However, "we also see the applicability of our technology in enterprises. And that's a segment that is going to be very large, can possibly be even larger than the infrastructure business in a few years' time," he said.
Shares of Ericsson today were trading up about 2%, to $6.96. So far this year, shares in Ericsson have lost a third of their value.
The company is still involved with investigations at the Department of Justice (DoJ) and Securities and Exchange Commission (SEC) related to the Iraq investigation.
Ericsson disclosed in February that an internal investigation found that the company may have made payments to the ISIS terror organization to gain access to certain transport routes in Iraq. The investigation looked into the conduct of Ericsson employees, vendors and suppliers in Iraq from 2011 to 2019.
The company said this week it can’t assess how those matters will be resolved but it’s fully committed to cooperating with authorities.