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Acacia Elects To Terminate Merger Agreement With Cisco; But Cisco Says Receive China Approval

Acacia Communications Inc. (ACIA) said Friday that it has elected to terminate its merger agreement with Cisco Systems Inc. (CSCO), effective immediately.

The proposed merger, announced in July 2019, was conditioned on the satisfaction or waiver of customary closing conditions, including obtaining necessary regulatory approvals within the timeframe contemplated by the merger agreement, Acacia said in a statement.

Acacia said that the Chinese government's State Administration for Market Regulation approval was not received within the timeframe contemplated by the merger agreement. Therefore, the company 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.

Cisco has informed Acacia that it may dispute Acacia's right to have terminated the merger agreement. Acacia plans to defend any such claims, Acacia said.

In a separate press release, Cisco said that it is seeking confirmation from the Delaware Court of Chancery that it has met all conditions for closing of its acquisition of Acacia Communications, including approval of China's State Administration for Market Regulation or SAMR.

Cisco said it 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.

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."

In July 2019, Cisco agreed to buy Acacia Communications for $70.00 per share in cash or about $2.6 billion on a fully diluted basis, net of cash and marketable securities.

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