Cisco drags Acacia toward court to keep stalled $2.6bn acquisition on track

Smaller biz terminates deal after Chinese watchdogs dither


Optical networking biz Acacia Communications announced today it has pulled out of a $2.6bn merger agreement with Cisco.

Cisco, meanwhile, isn't letting go, and said it will sue to prevent Acacia from walking away from the deal. Both companies appear to be at loggerheads over the matter, judging by their public statements.

“Acacia Communications today announced that it has elected to terminate its merger agreement with Cisco Systems, Inc, effective immediately,” Acacia, headquartered in Maynard, Massachusetts, said.

The decision to withdraw was made after the deal did not receive the approval from the Chinese government in time. Although Acacia is based in the US, it has a big customer base in the Middle Kingdom and so regulatory approval there is crucial.

“Because approval of the Chinese government’s State Administration for Market Regulation (SAMR) was not received within the timeframe contemplated by the merger agreement, Acacia 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 in accordance with the terms of the merger agreement,” it continued.

optic fibre

Big Switch to Big Photon for Cisco: Switchzilla to splurge $2.6bn on Acacia

READ MORE

Cisco, however, is insistent that Acacia cannot pull out of the takeover deal struck between them. Switchzilla has asked a Delaware Court of Chancery to confirm that it has not only jumped through all the legal hoops to close the merger but that Beijing has all but OK'd the takeover.

“Cisco 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,” the Silicon Valley goliath said. “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.'”

Acacia said it “intends to defend any such claims.” Representatives from Cisco and Acacia declined to provide further comment.

The skirmish between both companies comes at a time when tensions between America and China over technology have been steadily escalating. Acacia shares jumped up 13 per cent on the news, while Cisco’s have hardly budged, moving up just 0.21 per cent at the time of writing. ®

Similar topics

Broader topics


Other stories you might like

  • DuckDuckGo tries to explain why its browsers won't block some Microsoft web trackers
    Meanwhile, Tails 5.0 users told to stop what they're doing over Firefox flaw

    DuckDuckGo promises privacy to users of its Android, iOS browsers, and macOS browsers – yet it allows certain data to flow from third-party websites to Microsoft-owned services.

    Security researcher Zach Edwards recently conducted an audit of DuckDuckGo's mobile browsers and found that, contrary to expectations, they do not block Meta's Workplace domain, for example, from sending information to Microsoft's Bing and LinkedIn domains.

    Specifically, DuckDuckGo's software didn't stop Microsoft's trackers on the Workplace page from blabbing information about the user to Bing and LinkedIn for tailored advertising purposes. Other trackers, such as Google's, are blocked.

    Continue reading
  • Despite 'key' partnership with AWS, Meta taps up Microsoft Azure for AI work
    Someone got Zuck'd

    Meta’s AI business unit set up shop in Microsoft Azure this week and announced a strategic partnership it says will advance PyTorch development on the public cloud.

    The deal [PDF] will see Mark Zuckerberg’s umbrella company deploy machine-learning workloads on thousands of Nvidia GPUs running in Azure. While a win for Microsoft, the partnership calls in to question just how strong Meta’s commitment to Amazon Web Services (AWS) really is.

    Back in those long-gone days of December, Meta named AWS as its “key long-term strategic cloud provider." As part of that, Meta promised that if it bought any companies that used AWS, it would continue to support their use of Amazon's cloud, rather than force them off into its own private datacenters. The pact also included a vow to expand Meta’s consumption of Amazon’s cloud-based compute, storage, database, and security services.

    Continue reading
  • Atos pushes out HPC cloud services based on Nimbix tech
    Moore's Law got you down? Throw everything at the problem! Quantum, AI, cloud...

    IT services biz Atos has introduced a suite of cloud-based high-performance computing (HPC) services, based around technology gained from its purchase of cloud provider Nimbix last year.

    The Nimbix Supercomputing Suite is described by Atos as a set of flexible and secure HPC solutions available as a service. It includes access to HPC, AI, and quantum computing resources, according to the services company.

    In addition to the existing Nimbix HPC products, the updated portfolio includes a new federated supercomputing-as-a-service platform and a dedicated bare-metal service based on Atos BullSequana supercomputer hardware.

    Continue reading

Biting the hand that feeds IT © 1998–2022