Acacia Communications (ACIA) – Get report shares rose on Thursday after the optical component maker said it agreed to a new $ 4.5 billion merger with Cisco Systems (CSCO) – Get report after a disagreement related to China’s regulatory approval.
Cisco will pay $ 115 per share for Acacia, the company said, ending months of disputes over the 2019 deal that aims to give Cisco a clearer path to spending linked to the launch of 5G networks. US, German and Austrian regulators approved the proposed acquisition, but a delay in obtaining approval from China before the January 8 deadline caused Acacia to close the original deal.
“We maintain our strong belief in the strategic benefits of joining the Cisco family and believe that this will allow us to offer better support to our existing customers, while reaching an expanded footprint of new customers globally,” said Acacia CEO Raj Shanmugaraj . “We are pleased to have reached this agreement with Cisco and look forward to moving forward with the combination that we believe will transform the optical industry, while offering great opportunities for Acacia employees to continue innovating.”
Acacia shares rose 32.6% in early Thursday afternoon trading after the merger agreement to change hands at $ 114.64 each. Meanwhile, Cisco shares rose 0.33% 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 at Cisco to offer our customers consistent, world-class optical solutions to power the Internet for the future.”