Acacia Communications (ACIA) – Get the report shares rose Thursday after optical component maker said it agreed to a new $ 4.5 billion merger with Cisco Systems (CSCO) – Get the report after a disagreement over China’s regulatory approval.
Cisco will pay $ 115 a share for Acacia, the company said, ending months of fighting over the 2019 deal meant to give Cisco a clearer path in spending on launching the 5G network. Regulators in the US, Germany and Austria approved the proposed takeover, but a gap in obtaining approval from China before the January 8 deadline led to Acacia terminating the original agreement.
“We remain strongly convinced of the strategic benefits of joining the Cisco family and believe that it will enable us to better support our existing customers, while reaching an expanded footprint of new customers globally,” said Acacia CEO Raj Shanmugaraj. “We are excited to have reached this agreement with Cisco and are excited to move forward with the combination that we believe will transform the optical industry, while providing excellent opportunities for Acacia employees to continue their innovation.”
Acacia shares were up 32.6% higher on trading in the early afternoon on Thursday, following the merger agreement to change hands to $ 114.64 each. Meanwhile, Cisco shares rose 0.33% to $ 45.52 each.
“I’m excited that Cisco and Acacia have decided to come together in this mutual agreement,” said CEO Chuck Robbins. “We look forward to welcoming Raj and the Acacia team to Cisco to provide our customers with world-class consistent optical solutions to power the Internet for the future.”