Zoom has ditched a deal to acquire Five9 valued at a staggering $14.7 million.
The deal was abandoned a matter of weeks after the US Department of Justice raised national security concerns with shareholders advised to vote against the takeover by a proxy group.
The companies announced at the eleventh hour last night they would scrap the agreement following a shareholder meeting organised by Five9 during which a majority of investors said they were against the takeover.
Rowan Trollope, chief executive of Five9, said: “We had the opportunity to engage extensively with our shareholders since our transaction announcement. We greatly appreciate their feedback and confidence in Five9’s future prospects and share their views regarding the significant potential for value creation as a standalone company.”
The decision to end the takeover is a blow to Zoom, which is hoping to expand its offerings following the enormous success of its video conferencing services during the pandemic.
The Five9 deal would have been Zoom’s largest acquisition to date, but suggestions Zoom has links to China deterred investors. This comes from Zoom’s China-based developers which has been somewhat of a concern for US officials when it comes to the security of users.
Zoom has consistently stated none of its customers’ data flows through China-based servers, although it admitted last year it had mistakenly routed some calls through China.
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