Is Ericsson's $6.2 Billion Acquisition of Vonage a Smart Move?

The European telecom vendor Ericsson (NASDAQ: ERIC) announced this week an agreement to acquire the communications specialist Vonage Holdings (NASDAQ: VG) for $6.2 billion in cash. With Ericsson's share price down following the news, the market doesn't look excited by the company's largest deal ever.

The synergies between Ericsson's 5G business and Vonage's unified communications platform seem limited. However, Ericsson has a long-term plan that could boost its enterprise services business over the long term. Let's dig in.

Over the last several years, Ericsson has consolidated its leadership in the 5G markets. For instance, it increased its share in the radio access network market in North American from 48% in 2018 to 53% in 2020.

Source Fool.com