Video conferencing giant Zoom and cloud contact software company Five9 have announced they are abandoning a $14.7 billion deal, which was first announced in July. The deal aimed to help Zoom transition its business for the hybrid future of working by moving into the contact cloud sector.
This comes as Five9 failed to get sufficient shareholder support for the merger.
"Today, Five9 announced that we will not be moving forward with our proposed acquisition by Zoom. We believe that continuing as a standalone company is in the best interests of our company and shareholders at this time." @rowantrollope Five9, CEO
— Five9 (@Five9) September 30, 2021
Trollope continued in a blogpost: “Just like with all of our other valued partners, we look forward to continuing the partnership with Zoom that was in place prior to our agreement.”
Zoom CEO Eric Yuan noted in a blogpost that Zoom has a “laser focus on innovation to build our offering at speed and scale” and “we have also looking to acquire capabilities through M&A”.
“Five9 was one such opportunity, as it presented an attractive means to bring to our customers an integrated contact center offering.
“That said, it was in no way foundational to the success of our platform nor was it the only way for us to offer our customers a compelling contact center solution”, added Yuan.
He continued in a statement: “The contact center market remains a strategic priority for Zoom, and we are confident in our ability to capture its growth potential.
“At Zoomtopia, we announced the Zoom Video Engagement Center, our cloud-based contact center solution, which will launch in early 2022. Video Engagement Center will be a flexible, easy-to-use solution that connects businesses and their customers.
“We are building this new solution with the same scalability and trusted architecture that has made Zoom the platform of choice for businesses around the world.
“We also plan to maintain our valued existing contact center partnerships with companies like Five9, Genesys, NICE inContact, Talkdesk, and Twilio.”
DOJ investigates the merger
The decision to abandon the merger also comes hot on the heels of the US Department of Justice (DOJ) dialing up its scrutiny and investigation of Zoom’s first multi-billion acquisition for national security reasons.
The DOJ tasked its committee for the Assessment of Foreign Participation in the United States Telecommunications Service Sector with scrutinizing the deal “to determine whether this application poses a risk to the national security or law enforcement interest of the United States”.
There was particular concern over alleged “foreign participation” and influence over the deal as Zoom has a presence in China, while Five9 has operations in Russia.