Opticla networking biz Acacia Communications announced it had pulled out of the $2.6bn merger agreement with Cisco on Friday, but the Silicon Valley giant isn’t letting go and is seeking legal action to push the deal through.
Both companies appear to be at loggerheads over the matter, according to their public statements.
“Acacia Communications today announced that it has elected to terminate its merger agreement with Cisco Systems, Inc., effective immediately,” the company headquartered in Maynard, Massachusetts, said.
The decision to withdraw was made after the deal did not receive the approval from the Chinese government in time. Although Acacia is based in the US, it has a big customer base in the Middle Kingdom and so regualtoirs there have a say.
“Because approval of the Chinese government’s State Administration for Market Regulation (SAMR) was not received within the timeframe contemplated by the merger agreement, Acacia did not have an obligation to close the merger before the arrival of the January 8, 2021 extended end date. As such, Acacia exercised its right to terminate the proposed transaction in accordance with the terms of the merger agreement,” it continued.
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Cisco, however, is insistent that Acacia cannot pull out of the takeover deal without an explicit court order. It also asked the Delaware Court of Chancery to confirm that it has jumped through all the legal hoops to close the merger, and deserves approval from China’s SAMR.
“Cisco is also seeking a court mandate that the agreement may not be terminated until the court resolves these matters, and an order from the Court requiring Acacia to close the transaction,” it said. “On January 7, 2021, Cisco was notified by SAMR that the agency has determined that Cisco’s submission is “sufficient to address the relevant competition concerns.”
Acacia said it “intends to defend any such claims.” Representatives from Cisco and Acacia declined to provide further comment to The Register.
The skirmish between both companies comes at a time when tensions between the US and China over technology have been steadily escalating over time, making it difficult for mergers and acquisitions.
Acacia shares jumped up 13 per cent on the news, while Cisco’s have hardly budged – moving up just 0.21 per cent at the time of writing. ®