The planned merger of Zoom and Five9 is a no-go as the two companies have mutually agreed to terminate the deal.

Five9’s shareholders rejected the merger with Zoom at a special meeting Thursday. Five9 will continue to operate as a standalone publicly traded company.

In July, Zoom and Five9 disclosed the $14.7 billion transaction. Through the acquisition, Zoom could extend its global communications network with a cloud-based contact center as a service.

Zoom expected to complete the Five9 merger in the first half of 2022.

Eric Yuan is Zoom’s CEO and founder.

Zoom’s Eric Yuan

“While we were excited about the benefits this transaction would bring to both Zoom and Five9 stakeholders, including the long-term potential for both sets of shareholders, financial discipline is foundational to our strategy,” he said. “We remain focused on driving long-term value creation for Zoom shareholders and delivering happiness to our customers through our broad-based communications platform including unified communications, developer and events solutions.”

At Zoomtopia, Zoom announced its Zoom Video Engagement Center, a cloud-based contact center solution. It will launch in early 2022.

Strong On Its Own

Rowan Trollope is Five9‘s CEO.

“Five9 has built an industry-leading and differentiated cloud contact center platform that has transformed the way businesses engage with their customers,” he said. “Over the past few months, we have continued to execute relentlessly in the market. The contact center is the new front door for business and, as the market shifts from on-premises to cloud and digital transformation accelerates, we believe we are positioned to build on this momentum and grow market share.”

The proposed merger wasn’t without controversy. Research analyst Scott Berg said Zoom’s offer to acquire Five9 was “fundamentally flawed” and Five9’s shareholders should reject it. In addition, the U.S. Justice Department stressed concerns about the potential merger based on national security concerns.

Five9 has operations in Russia, while Zoom has research and development staff in China.

“We had the opportunity to engage extensively with our shareholders since our transaction announcement,” Trollope said. “We greatly appreciate their feedback and confidence in Five9’s future prospects and share their views regarding the significant potential for value creation as a standalone company.”