STOCKHOLM, Sweden: In a $6.2 billion agreement, Swedish telecom equipment maker Ericsson is purchasing U.S. cloud communications company Vonage, in a bid to expand its wireless services for business customers.
Founded some two decades ago, Vonage was a pioneer of internet-based telephone service, and it evolved into a platform for application programming interfaces that enable different software applications to communicate with each other.
The acquisition will also give Ericsson access to software developers who can create new applications to take advantage of features built into Ericsson's new fifth generation high speed wireless networks.
The deal is the "next step" in delivering Ericsson's strategic goal of developing leading mobile networks, said the company CEO Borje Ekholm in a statement.
"Vonage will give us a platform to help our customers monetize the investments in the network, benefitting developers and businesses," he added.
In an all cash agreement, Ericsson agreed to buy Vonage for $21 per share, 28 percent higher than Vonage's closing share price on Friday.
The deal is expected to close in the first half of 2022.