By Kuldip K. Ambastha
On Monday, November 22, 2021, Vonage Holdings Corp. (VG), a leading telecommunications services corporation, delivered a return of +27.0% per share for the trading day. Why? The key catalyst here was an announcement from Telefonaktiebolaget LM Ericsson (ERIC), more commonly known as Ericsson. Over the weekend, Ericsson stated that it would be purchasing Vonage for $21.00 per share, for an enterprise value total of $6.2 billion. This intended transaction received unanimous approval from the board of directors of Vonage. On Monday, November 22, 2021, Ericsson delivered a return of -7.1% per share for the trading day, as investors processed the high price Ericsson was paying to purchase Vonage. Ericsson intends to use the transaction in order to expand its global presence in wireless telecommunications. The deal will close in the first half of 2022, subject to approval from regulators and Vonage shareholders plus legal and regulatory conditions which may be put into place. The Ericsson / Vonage transaction may prompt other telecommunications sector combinations in the future, as rival firms seek to inorganically gain scale and aggressively expand their own global presences.
Keywords – Vonage Holdings Corp., Vonage Holdings, Vonage, VG, Telefonaktiebolaget LM Ericsson, Ericsson, ERIC, telecommunications, services, wireless, catalyst, purchase, transaction, deal, combination, merger, acquisition, M&A.
Disclosure – The principals and clients of Ambastha Financial LLC have no positions in VG or ERIC.
Disclaimer – No recommendations are being made via this post. Past performance is not an indicator of future performance. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2021 – Ambastha Financial LLC.
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