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It looks like the latest multi-billion dollar staged marriage in the tech industry is once again underway. Thursday, Cisco Systems (NASDAQ: CSCO) and Acacia Communications (NASDAQ: CFIA) announced in a joint press release that the merger will continue. On top of that, they’ve accepted a dramatic increase in the price Cisco will pay to effectively acquire its counterpart.
The deal made headlines after Acacia, surprisingly enough, sent out a notice saying it was ending it late last week. The company cited the fact that China’s State Administration for Market Regulation (SAMR) does not approve the deal in a timely manner as the reason for doing so. Cisco quickly sued Acacia in a Delaware Chancellery court to force the issue.
Image source: Getty Images.
The Wall Street Journal quoted an anonymous Cisco spokesperson as saying the company intended to have the lawsuit dismissed.
If the deal is finally made, it will be much larger than expected. When the two companies signed the initial agreement in July 2019, Cisco pledged to pay $ 70 per share for Acacia – a 46% premium over the latter’s share price at the time. Under the revised terms, the price jumped to $ 115 – all told, that’s about $ 4.5 billion.
Cisco, which is struggling to restart its growth engine, sees great promise from the manufacturer of optical network solutions.
The two companies said in the press release that their marriage “strengthens Cisco’s commitment to optics as a critical cornerstone that will enhance the company’s ‘Internet for the Future’ strategy with optical solutions. world-class consistency for customers, enabling them to tackle unprecedented problems.scale of modern [information technology]. “
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