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Cisco Reaches New Deal To Buy Acacia For About $4.5 Bln

Cisco Systems Inc. (CSCO) and Acacia Communications (ACIA) have amended their merger agreement, by which Cisco will acquire Acacia for $115 per share in cash or about $4.5 billion on a fully diluted basis, net of cash and marketable securities.

In July 2019, Cisco had 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.

The companies said Thursday that they expect to complete the acquisition by the end of the first calendar quarter of 2021.

"We are pleased to have reached this agreement with Cisco and are excited to move forward with the combination which we believe will transform the optical industry..." Raj Shanmugaraj, president and CEO of Acacia said on Thursday.

Upon completion of the acquisition, CEO Raj Shanmugaraj and Acacia employees will join Cisco's Optics business.

On Monday, Acacia Communications said that it filed a counterclaim against Cisco Systems seeking a declaration that Acacia validly terminated the merger agreement with Cisco because the required Chinese regulatory approval was not obtained and the merger did not close before the agreed-upon termination date under the agreement.

On January 8, Acacia delivered to Cisco a notice to terminate the merger agreement for the proposed acquisition of Acacia by Cisco.

The merger agreement had afforded the parties 18 months to obtain the necessary antitrust approvals from the Chinese government before, either Acacia or Cisco could terminate the agreement on January 8, 2021. Such approval was not received before January 8, and Acacia delivered a notice of termination of the merger agreement on that date.

Cisco had initiated litigation against Acacia in Delaware challenging the company's termination of the merger agreement, claiming that the Chinese Government's State Administration for Market Regulation or "SAMR" approval was received on January 7.

Acacia said Monday that it believed that a January 7, email from a SAMR employee stating Cisco's submission was "sufficient to address the relevant competition concerns" did not constitute regulatory approval, as Cisco claims.

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