Acacia Communications said it's pulling out of an agreement to be acquired by Cisco, after the company did not secure the necessary regulatory approvals in time. Cisco is disputing the decision in court, saying that it has met the necessary conditions to complete the takeover.
The proposed acquisition was first announced in July 2019 for USD 2.6 billion. Acacia claims that Cisco did not obtain clearance from China's State Administration for Market Regulation by the required deadline, and as such, it's not obliged to close the deal by the extended deadline of 08 January.
Acacia said it exercised its right to terminate the proposed transaction in accordance with the terms of the merger agreement. The announcement sent the company's share price nearly 10 percent higher at USD 79.60, compared to Cisco's agreed takeover price of USD 70 per share.
Cisco has turned to a Delaware court to force the takeover to go ahead. The company said it was notified 07 January by the Chinese regulator that Cisco’s submission is "sufficient to address the relevant competition concerns", so it has met all the conditions for closing the deal. It asked for a court order that the agreement may not be terminated until the court resolves these matters, and an order requiring Acacia to close the transaction.
