In Friday, Acacia communications 09.30 NASDAQ: ACIA terminated its merger agreement with a network equipment giant Cisco Systems 09.30 NASDAQ: CSCO. Acacia said the decision, which took effect immediately, was due to the fact that the State Market Regulation Administration (SAMR) in the company’s native China did not approve the deal in time.
Cisco soon responded with a brief press release stating that it was seeking confirmation from the Delaware Chancellery that all conditions had in fact been met. These include the SAMR approval that Cisco claims to have received on Thursday, January 7.
Cisco said it “also wants a court mandate that the agreement cannot be terminated until the court resolves these issues, as well as a court order requiring Acacia to close the deal.”
In a press release, Acacia, a maker of optical network technology, said it would essentially challenge the move.
The deal was originally announced in July 2019, with the two companies agreeing that Cisco would pay $ 70 a share for Acacia in a $ 2.6 billion all-cash deal. At that time, the price was a 46% surcharge on the value of the shares before the announcement.
At the time, Cisco’s general manager for networking and security business, David Göckeler, said owning the Chinese company “would allow us to upgrade the strength of our switching, routing and fiber-optic portfolio to meet our customers’ most demanding requirements.” “.
This would also provide him with a direct link to the huge Chinese market. Its sales in the country are relatively limited and it is generally struggling with growth.
On Friday, acacia stocks closed nearly 10 percent higher as Cisco rose during the day.