Acacia Communications Scraps Takeover by Cisco -- Update
January 08 2021 - 10:18AM
Dow Jones News
By Dave Sebastian
Acacia Communications Inc. said it is scrapping its roughly $2.6
billion takeover by Cisco Systems Inc. because the companies
haven't received the Chinese government's approval for the
combination within an allotted time frame.
Networking-equipment maker Cisco had agreed to buy Acacia, a
Maynard, Mass.-based maker of optical interconnect technologies
such as modules and semiconductors, in July 2019 for $70 a share,
as Cisco sought to serve rising performance demands on networking
gear from data-center operators and telecom-service providers.
Cisco told Acacia it could dispute Acacia's right to terminate
the combination agreement, Acacia said, adding that the company
plans to defend such claims.
Cisco on Friday said it has received approval from China's State
Administration for Market Regulation for the deal. The agency told
Cisco that the company's submission was "sufficient to address the
relevant competition concerns," Cisco said. The company is seeking
confirmation from the Delaware Court of Chancery that it has met
all conditions for the combination and an order from the court to
order Acacia to close the transaction, Cisco added.
The San Jose, Calif.-based Cisco has come under the radar of
Chinese government agencies for a blacklist that could be used to
punish U.S. technology firms, in an effort by Beijing to respond to
Washington's restrictions on telecom giant Huawei Technologies
Co.'s access to U.S. components and technology, The Wall Street
Journal reported in September.
The company, which competes with Huawei, already has lost
contracts to supply some of its long-term Chinese customers, such
as China's large state-owned telecom carriers.
In seeking to acquire Acacia, Cisco in 2019 said Acacia's
technology would enable users of its hardware to drive more data
over high-speed internet networks. Cisco executives said the
company was looking to take advantage of a growing trend of
customers migrating to pluggable technology from chassis-based
systems. Pluggable modules give network operators a more efficient
way to increase the data that runs over networks.
Write to Dave Sebastian at dave.sebastian@wsj.com
(END) Dow Jones Newswires
January 08, 2021 10:03 ET (15:03 GMT)
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