Acacia Communication (ACIA) – Get report Shares rose higher on Thursday after the optical component maker announced a new $ 4.5 billion merger with Cisco Systems (CSCO) – Get report after a disagreement over the approval of China’s regulations.
Cisco will pay $ 115 per share for Acacia, the company said, ending months of disputes over the 2019 deal, which aims to give Cisco a clearer path to spending related to the implementation of 5G networks. Regulators in the US, Germany and Austria approved the proposed takeover, but a delay in obtaining China’s approval before a January 8 deadline led Acacia to terminate the original agreement.
“We maintain our strong belief in the strategic benefits of joining the Cisco family and believe that it will enable us to better support our existing customers while achieving an extensive footprint of new customers worldwide,” he said. Raj Shanmugaraj, CEO of Acacia, said. “We are delighted to have reached this agreement with Cisco and are excited to continue with the combination that we believe will transform the optical industry, while providing Acacia employees with great opportunities to continue their innovation.”
Shares of Acacia were up 32.6% higher on Thursday afternoon after the merger agreement to change from $ 114.64 each. Cisco shares, meanwhile, rose 0.33% higher to $ 45.52 each.
“I am delighted that Cisco and Acacia have decided to come together in this mutual agreement,” said CEO Chuck Robbins. “We look forward to welcoming Raj and the Acacia team to Cisco to offer our customers world-class cohesive optical solutions to provide the Internet for the future.”