Zoom’s plans to establish itself in the call center business with a billion-dollar takeover have failed. In July, Zoom made a takeover bid for Five9. Five9 is a Californian cloud software provider for call centers. In the event of a takeover, each Five9 share would have been converted into 0.5533 Zoom shares. However, this offer did not meet with the necessary approval from the Five9 owners.
That has Communicated to Five9 on Thursday. The rejection is likely due to the fact that Zoom’s shares have fallen by a good quarter since the takeover offer was made. While the shares offered by Zoom for Five9 were worth a total of $ 14.7 billion in mid-July, they would now be less than $ 11 billion.
The price decline is due, among other things, to the fact that the coronavirus pandemic has enormously increased the demand for video conferencing. Zoom has grown immensely for several quarters, but cannot repeat the high growth rates indefinitely.
Both companies have now agreed to call off the takeover. Zoom apparently does not want to improve its offer. The already existing cooperation between the two companies is to continue. Zoom and Five9 want to jointly market their cloud offerings for call centers and unified communications.
US investigation no longer necessary
The cancellation means work is easier for the US government. An inter-ministerial working group led by the Justice Department had initiated a review of the Five9 takeover. The task force should determine whether the acquisition of the California company poses a risk to national security or other law enforcement interests.
The background is that Zoom is said to have strong ties to the People’s Republic of China, not just through shareholders and programmers. In December, a Chinese Zoom executive was charged in the United States for sabotaging Zoom video conferences in memory of the 1989 Tiananmen State massacre in Beijing. Zoom has since given notice to the man. China will not extradite him to the US.
As early as June 2020, Zoom had admitted that it had punished video meetings of Chinese human rights activists in the USA and Hong Kong under pressure from the Chinese regime and closed the accounts of the inviting people. From now on, the company would only like to obey state censorship orders in the respective country. In China, Zoom has closed all individual user accounts at all.
Another scandal was Zoom is caught storing electronic keys on Chinese servers from time to time, even if nobody attends the Zoom conference there. With these keys it is possible to intercept and falsify encrypted conferences. Zoom promised recovery.