Acacia Communications (ACIA) shares surged higher Thursday after the optical component maker said it has agreed a new $4.5 billion merger with Cisco Systems (CSCO) after a disagreement linked to regulatory approval from China.
Cisco will pay $115 per share for Acacia, the company said, ending months of wrangling over the 2019 deal aimed at giving Cisco a clearer path into spending linked to 5G network rollouts. Regulators in the U.S., Germany and Austria had cleared the proposed takeover, but a lag in obtaining approval from China before a January 8 deadline caused Acacia to terminate the original deal.
“We maintain our strong conviction in the strategic benefits of joining the Cisco family and believe 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 pleased to have reached this agreement with Cisco and are excited to move forward with the combination which we believe will transform the optical industry, while providing great opportunities for Acacia employees to continue their innovation.”
Acacia shares were marked 32.6% higher in early afternoon trading Thursday following the merger agreement to change hands at $114.64 each. Cisco shares, meanwhile, edged 0.33% higher to $45.52 each.
“I am delighted that Cisco and Acacia have decided to come together in this mutual deal,” said CEO Chuck Robbins. “We look forward to welcoming Raj and the Acacia team to Cisco to offer our customers world-class coherent optical solutions to power the Internet for the future.”