on Friday, Acacia Communications (Nasdaq: ACIA) It terminated the merger agreement with the networking equipment giant Cisco Systems (Nasdaq: CSCO). Acacia said the decision, which took effect immediately, was due to the fact that the State Administration of Market Regulation (SAMR) in its parent China did not approve the deal in time.
Cisco quickly responded with a brief press release indicating that it was seeking assurance from a Delaware court that all conditions, in fact, had been met. These include SAMR’s approval, which Cisco claims received on Thursday, January 7.
Cisco said it “is also seeking authorization from the court not to terminate the agreement until the court resolves these matters, and a court order requiring Acacia to close the deal.”
In its press release, Acacia – a maker of optical network technologies – said it would oppose the move.
The deal was originally announced in July 2019, when the two companies agreed that Cisco would pay $ 70 per share to Acacia in an all-cash $ 2.6 billion deal. At that time, the price was a 46% premium Acacia share value prior to the announcement.
At the time, Cisco’s General Manager Network and Security Business, David Goeckeler, said owning the Chinese company “will allow us to build on the strength of our range of switching, routing and optical networks to meet our customers’ most demanding requirements.”
It would also give it a direct link to the huge Chinese market. Its sales in the country have been relatively limited, and it is generally Struggling with growth.
On Friday, Acacia stock raced to close up nearly 10%, with Cisco’s fixed lines in place for the day.