(Reuters) – Acacia Communications Inc said on Friday it entered into a merger deal with Cisco Systems Inc that agreed to buy the optical component maker for $ 2.84 billion after it failed to gain regulatory approval. from China.
The merger, initially scheduled to close in the second half of full year 2020 of Cisco, was cleared by the United States, Germany and Austria, but had undergone regulatory review by China, the only remaining closing condition of the company. ‘agreement.
Acacia said on Friday that the deal was unable to receive approval from State administration of the Chinese government for market regulation within the time frame stipulated in the merger agreement.
Shares of networking equipment manufacturer Cisco fell roughly 1% in trading before the bell.
The company did not immediately respond to a request for comment.
Cisco agreed to buy Acacia for cash in 2019, as it sought to raise a larger chunk of 5G spending from telecom companies. Cisco said it could challenge the optical gear maker’s right to terminate the merger agreement, Acacia added.
Akanksha Rana reporting in Bengaluru; Editing by Shinjini Ganguli