Acacia terminates merger agreement with Cisco

Acacia terminates merger agreement with Cisco

© Reuters. FILE PHOTO: The Cisco Systems logo is seen as part of a display at the Microsoft Ignite technology conference in Chicago © Reuters. FILE PHOTO: The Cisco Systems logo is seen as part of a display at the Microsoft Ignite technology conference in Chicago

(Reuters) – Acacia Communications (NASDAQ:ACIA) Inc said on Friday it has terminated a merger deal with Cisco Systems Inc (NASDAQ:CSCO) that had agreed to buy the optical component maker for $2.84 billion, after it failed to obtain regulatory approval from China.

The merger, initially expected to close in the second half of Cisco's full-year 2020, was cleared by the United States, Germany and Austria, but had been under regulatory review by China, the only remaining closing condition of the deal.

Acacia said of Friday the deal was unable to receive approval from Chinese government's State Administration for Market Regulation within the timeframe contemplated by the merger agreement.

Shares of network gear maker Cisco were down about 1% in trading before the bell.

The company did not immediately respond to a request for comment.

Cisco in 2019 agreed to buy Acacia in cash, as it sought to garner a bigger chunk of 5G spending by telecom companies. Cisco has said it may dispute the optical gear maker's right to terminate the merger agreement, Acacia added.

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