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 related to China’s regulatory approval.
Cisco will pay $ 115 per share for Acacia, the company said, which ended months of disputes over the 2019 deal with the goal of giving Cisco a clearer path to spending related to the deployment of the 5G network. Regulators in the United States, Germany, and Austria had scrapped the acquisition proposal, but a delay in obtaining China’s approval before the Jan. 8 deadline caused Acacia to end the original deal.
“We maintain our strong conviction of the strategic benefits of joining the Cisco family and believe that it will allow us to better support our existing customers, while achieving an expanded footprint of new customers globally,” said Raj Shanmugaraj, general manager of Acacia. “We are pleased to have reached this agreement with Cisco and are excited to move forward with the combination we believe will transform the optical industry, while providing great opportunities for Acacia employees to continue their innovation.”
Shares of Acacia rose 32.6% more in early afternoon trading on Thursday following the merger deal to change hands to $ 114.64 each. Shares of Cisco, meanwhile, rose 0.33% more to $ 45.52 each.
“I’m thrilled that Cisco and Acacia have decided to join in this mutual agreement,” said Chuck Robbins, CEO. “We look forward to welcoming Raj and the Acacia team to Cisco to provide our customers with state-of-the-art consistent optical solutions that fuel the Internet for the future.”