It seems that the latest stop-and-start marriage for a million dollars in the technology sector is now once again a chance. On Thursday, Cisco systems (NASDAQ: CSCO) and Acacia Communication (NASDAQ: ACIA) announced in a joint press release that the merger will continue. In addition, they have agreed to a dramatic increase in the price that Cisco will pay to effectively reach its counterpart.
The deal was in the news after Acacia announced quite surprisingly that it would end it late last week. The company quoted the Chinese State Administration for Market Regulation (SAMR) and did not approve the arrangement in a timely manner as the reason for it. Cisco immediately sued Acacia in a Delaware court to force the case.
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The Wall Street Journal quoted an unnamed Cisco spokesman as saying the company intends to dismiss the lawsuit.
If the agreement finally goes through, it will be much bigger than first envisioned. When the two companies signed the original agreement in July 2019, Cisco promised to pay $ 70 per share for Acacia – a 46% premium to the latter’s share price at the time. Under the revised terms, the price zoomed in to $ 115 – that is to say, it amounts to about $ 4.5 billion.
Cisco, which is struggling to restart its growth engine, sees great promise in the optical network solutions maker.
The two companies said in the press release that their marriage “strengthens Cisco’s commitment to optics as a critical building block that will enhance the company’s” Internet for the Future “strategy with coherent world-class optical solutions for customers, which they will enable to give the unprecedented attention. scale of modern [information technology]. “