It seems that the latest multi-billion dollar marriage in the technology industry is now, once again, ready. On thursday, Cisco Systems (NASDAQ: CSCO) and Acacia Communications (NASDAQ: ACIA) announced in a joint press release that the merger will move forward. In addition, they agreed to a dramatic increase in the price that Cisco will pay to effectively acquire its partner.
The deal made news after Acacia, quite surprisingly, sent a notice that it was shutting it down last week. The company cited China’s State Market Regulation Administration (SAMR), which failed to approve the deal in a timely manner as a reason to do so. Cisco immediately sued Acacia in a Delaware Chancellery Court to force the issue.
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Wall Street Newspaper quoted an unnamed Cisco spokeswoman as saying the company wants the lawsuit to be closed.
If the deal is finally concluded, it will be much larger than originally planned. When the two companies signed the original deal in July 2019, Cisco pledged to pay $ 70 per share for Acacia – a 46% premium to the stock price of Acacia at the time. Under revised terms, the price skyrocketed to $ 115 – altogether, that’s about $ 4.5 billion.
Cisco, which has struggled to restart its growth engine, sees great promise in the manufacturer of optical networking solutions.
The two companies said in the press release that their marriage “reinforces Cisco’s commitment to optics as a critical building block that will enhance the company’s ‘Internet for the Future’ strategy with consistent, world-class optical solutions for customers , allowing them to further address the unprecedented scale of the modern [information technology]. “