CSCO Cisco Systems Inc

By Dave Sebastian 

Acacia Communications Inc. said it is scrapping its roughly $2.6 billion takeover by Cisco Systems Inc. because the companies haven't received the Chinese government's approval for the combination within an allotted time frame.

Networking-equipment maker Cisco had agreed to buy Acacia, a Maynard, Mass.-based maker of optical interconnect technologies such as modules and semiconductors, in July 2019 for $70 a share, as Cisco sought to serve rising performance demands on networking gear from data-center operators and telecom-service providers.

Cisco told Acacia it could dispute Acacia's right to terminate the combination agreement, Acacia said, adding that the company plans to defend such claims. Cisco didn't immediately respond to a request for comment.

The San Jose, Calif.-based Cisco has come under the radar of Chinese government agencies for a blacklist that could be used to punish U.S. technology firms, in an effort by Beijing to respond to Washington's restrictions on telecom giant Huawei Technologies Co.'s access to U.S. components and technology, The Wall Street Journal reported in September.

The company, which competes with Huawei, already has lost contracts to supply some of its long-term Chinese customers, such as China's large state-owned telecom carriers.

In seeking to acquire Acacia, Cisco in 2019 said Acacia's technology would enable users of its hardware to drive more data over high-speed internet networks. Cisco executives said the company was looking to take advantage of a growing trend of customers migrating to pluggable technology from chassis-based systems. Pluggable modules give network operators a more efficient way to increase the data that runs over networks.

Write to Dave Sebastian at dave.sebastian@wsj.com

(END) Dow Jones Newswires

January 08, 2021 09:47 ET (14:47 GMT)

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