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As per reports, Cisco (CSCO) has been successful in gaining a temporary court order blocking Acacia Communications Inc. from dropping out of a planned merger between the two companies. Acacia was sued by Cisco in Delaware Chancery Court last week. After the hearing, Chancellor J. Travis Laster granted Cisco’s request for holding the order and allowed Cisco to move with the proceedings.
In July 2019, Cisco announced the acquisition of Acacia, an optical component maker, for about $2.6 billion. However, Acacia wanted to terminate the deal stating that it did not receive Chinese regulatory approval within the required time-frame of the merger agreement.
Lawyer for Cisco, William Lafferty, said during the hearing that Acacia was trying to exit the deal because it believed its valuation had increased recently since entering into the agreement and wanted to negotiate a more generous offer. “It has every motivation to walk away and terminate the deal that it has struck and that is what is ultimately driving this. On the other hand, for Cisco, “the termination or loss of a unique strategic merger like this one is a classic case of irreparable harm,” he argued.
Acacia’s decision to abandon the deal highlights Cisco’s challenges in obtaining clearance from China’s regulators amid the U.S.-China trade dispute, Bloomberg Intelligence analyst Woo Jin Ho wrote.
Cisco Systems, Inc. (CSCO) is a global technology leader that designs, manufactures, and sells Internet Protocol-based networking and other communications technology. To learn more about Cisco Systems, Inc. (CSCO) and to continue to track its progress please visit the Vista Partners Cisco Systems, Inc. Coverage Page
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