Zoom's $14.7 billion deal for Five9 under US national security review

A government review into the Zoom-Five9 deal will result in the deal's application for approval being halted for the time being.
Written by Campbell Kwan, Contributor
Image: Shutterstock

Zoom's proposed $14.7 billion deal to acquire Five9 is now under investigation by a government committee for potential national security risks.

In a letter sent to the Federal Communications Commission (FCC) last month, the Department of Justice (DOJ) requested for FCC's review of the Zoom-Five9 deal to be halted until a telecommunications security committee could assess for potential national security risks.

The FCC is responsible for reviewing whether deals such as the one made between Zoom and Five9 can be approved. Meanwhile, the telecommunications security committee is responsible for providing the FCC with reviews of potential foreign threats in the telecommunications sector. The committee was established last year by former US President Donald Trump.

"USDOJ believes that such risk may be raised by the foreign participation (including the foreign relationships and ownership) associated with the application, and a review by the committee is necessary to assess and make an appropriate recommendation as to how the Commission should adjudicate this application," DOJ foreign investment review acting chief David Plotinsky wrote in the letter.

Zoom released the following statement regarding the proposed deal:

"The Five9 acquisition is subject to certain telecom regulatory approvals. We have made filings with the various applicable regulatory agencies, and these approval processes are proceeding as expected. We continue to anticipate receiving the required regulatory approvals to close the transaction in the first half of 2022." 

Zoom announced the deal back in July, touting the move as a serious foray into contact centre-as-a-service market.

"Enterprises primarily communicate with their customers through the contact center. This acquisition can bring together best-in-class video and contact centre solutions to create a leading customer engagement platform that will redefine how companies of all sizes engage with their customers," Zoom CEO Eric Yuan said at the time.

In Zoom's most recent financial results, the company reported its total quarterly revenue exceeded $1 billion for the first time in the company's history.

The letter to FCC was first reported by the Wall Street Journal earlier on Tuesday.

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