Zoom Five9 deal goes kaboom after shareholders say 'nope'

$15bn merger scrapped following scrutiny from US authorities


Five9 shareholders have slammed the brakes on a proposed $15bn merger with videoconferencing giant Zoom.

The all-share transaction, mooted in July, would have seen Zoom snap up Contact-Centre-as-a-Service outfit Five9, broadening its reach beyond videoconferencing. With customers moving back to offices, a broader range of services would seem a smart move for a company whose name is to video chat what Google's has become for web searching.

It all looked so promising. The Zoom and Five9 boards had given the hefty transaction their blessing. Only regulatory approval and a nod from Five9 shareholders were required to seal the deal for an anticipated closure in the first half of 2022.

Alas, Uncle Sam began looking a little closer at the plan and Zoom's ties to China as the deal to acquire California-based Five9 rumbled on. Zoom, however, remained confident and told The Register: "We continue to anticipate receiving the required regulatory approvals to close the transaction in the first half of 2022."

And now the deal is off, with Five9 making the simple statement: "The agreement did not receive the requisite number of votes from Five9 shareholders to approve the merger with Zoom. Five9 will continue to operate as a standalone publicly traded company."

While the scrutiny of regulators cannot have helped matters, a factor in the decision by shareholders could also have been Zoom's tumbling stock price. Back when the deal was announced, Zoom's stock was worth considerably more than today, nudging above $400 at the beginning of July. At time of writing, the stock is nearer $262. A considerable drop in an all-stock transaction.

With its new plaything snatched from its grasp, Zoom is to have a crack at its own cloud-based contact centre in the form of the Video Engagement Center (VEC), due to launch in early 2022. ®

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