Acacia Communications Inc. said it is scrapping a plan to sell itself to networking-equipment giant Cisco Systems Inc. for roughly $2.6 billion as the companies dispute the status of the Chinese government’s approval for the combination.
Networking-equipment maker Cisco had agreed to buy Acacia, a Maynard, Mass.-based maker of optical interconnect technologies such as modules and semiconductors, in July 2019 for $70 a share, as Cisco sought to serve rising performance demands on networking gear from data-center operators and telecom-service providers.
Cisco told Acacia it could dispute Acacia’s right to terminate the combination agreement, Acacia said, adding that the company plans to defend such claims.
Cisco on Friday said it has received approval from China’s State Administration for Market Regulation for the deal. The agency told Cisco that the company’s submission was “sufficient to address the relevant competition concerns,” Cisco said. The company is seeking confirmation from the Delaware Court of Chancery that it has met all conditions for the combination and an order from the court to order Acacia to close the transaction, Cisco added.
The San Jose, Calif.-based Cisco has come under the radar of Chinese government agencies for a blacklist that could be used to punish U.S. technology firms, in an effort by Beijing to respond to Washington’s restrictions on telecom giant Huawei Technologies Co.’s access to U.S. components and technology, The Wall Street Journal reported in September.