Ericsson: new provision for Vonage acquisition

(CercleFinance.com) - Ericsson announced on Thursday that it had booked a new provision of SEK 11.
4bn (around E980m), essentially linked to the 2021 acquisition of the American company Vonage, a charge which will have no impact on its cash position.

This non-cash impairment is in addition to the SEK 32bn write-down that the Swedish network equipment supplier had already booked on its subsidiary last year, bringing total provisions to SEK 43.4bn (around E3.7bn).

In a press release, Ericsson justifies this new charge by the downward revision of growth prospects for Vonage, a specialist in cloud communications for businesses, against a backdrop of worsening market conditions.

With the acquisition of this programmable and unified platform, which enables the integration of video, voice, chat and messaging, Ericsson wanted to strengthen its offerings for professionals.

On the Stockholm Stock Exchange, Ericsson shares were down 0.8% on Thursday morning, while the OMXS30 index was up 0.3% at the same time, with investors reassured by the fact that this non-cash impairment charge will be cash neutral.


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