Acacia Communications (ACIA) – Request report Shares rose higher on Thursday after the optical components maker said it reached a new $ 4.5 billion merger with Cisco Systems (CSCO) – Request report after a disagreement over approval from China.
Cisco is paying $ 115 a share for Acacia, the company said, ending months of bickering over the 2019 deal to give Cisco a clearer path to spending related to the 5G network rollout. Regulators in the US, Germany and Austria had approved the proposed acquisition, but a delay in obtaining approval from China before a Jan. 8 deadline caused Acacia to cancel the original deal.
“We maintain our strong belief in the strategic benefits of joining the Cisco family and believe it will enable us to better support our existing customers while achieving a greater footprint of new customers worldwide,” said Raj Shanmugaraj, CEO from Acacia. “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.”
Acacia shares rose 32.6% higher in early afternoon trading Thursday following the merger agreement to change hands at $ 114.64 each. Cisco shares, meanwhile, were up 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 provide our customers with coherent, world-class optical solutions to power the Internet for the future.”