China clears Cisco-Acacia deal — with conditions

Cisco vows to go to court after Acacia tries to cancel $2.6 billion merger

China’s antitrust regulator approved Cisco Systems Inc.’s

acquisition of Acacia Communications Inc.
clearing the deal for completion under several conditions aimed to protect supply to the companies’ Chinese customers.

The State Administration for Market Regulation said that the U.S. telecom-equipment companies and subsequent merged entity must fulfill existing contracts with Chinese clients and keep commercial terms unchanged. The conditions, stipulated in a statement on SAMR’s website posted Tuesday, also required that Cisco and Acacia continue supplying certain products without discrimination and unreasonable terms.

Tuesday’s announcement removed a regulatory barrier that had nearly unraveled the deal earlier this month. Acacia had moved to terminate the agreement, first announced in July 2019, claiming Cisco hadn’t received timely approval from Chinese authorities. Cisco disputed the claim and raised the purchase price by 64%, cementing a new deal.

The need for Chinese regulatory approval has loomed large over some major tech deals as waiting times have increased and U.S.-China relations have soured.

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