(Reuters) -Zoom Video Communications Inc’s $14.7 billion deal to buy cloud-based call center operator Five9 Inc has been mutually terminated, the companies said on Thursday, scuttling the video conferencing platform’s largest-ever acquisition.
The development comes after proxy advisory firm Institutional Shareholder Services earlier this month recommended Five9 shareholders vote against the deal, citing growth concerns.
“The agreement did not receive the requisite number of votes from Five9 shareholders to approve the merger with Zoom,” San Ramon, California-based Five9 said.
“Five9 will continue to operate as a standalone publicly traded company.”
A U.S. Justice Department-led committee was also reviewing Zoom’s proposed all-stock deal to buy Five9, according to a letter filed with U.S. regulators.
The Aug. 27 letter filed with the Federal Communications Commission said the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector was reviewing to see if the deal “poses a risk to the national security or law enforcement interests”.
Analysts had said the deal, Zoom’s biggest to date, may be delayed by a U.S. Justice Department-led committee review but was unlikely to be scrapped.
Five9 said it would continue the partnership with Zoom that was in place prior to the announcement.
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