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Senior Editor

Cisco coughs up another $1.9B to buy Acacia

News Analysis
Jan 14, 20212 mins

Cisco raised its takeover offer for Acacia to $4.5 billion, up from $2.6 billion, in a move to boost Cisco's optical-system strategy.

After some saber-rattling, Cisco has sweetened the pot to acquire optical technology firm Acacia. The amended agreement calls for Cisco to pay $4.5 billion instead of the originally agreed upon $2.6 billion deal.

The companies said the amended acquisition should close by the end of the first calendar quarter of 2021, but it is still subject to closing conditions, including Acacia stockholder approval. Upon completion of the acquisition, Acacia CEO Raj Shanmugaraj and company employees will join Cisco’s Optics business.

The companies had filed court cases against each other this month. Cisco filed for a temporary restraining order on Jan. 8 to prevent Acacia from terminating its acquisition agreement with the company. Cisco’s move followed an Acacia proclamation that stated the company “has elected to terminate its merger agreement with Cisco Systems, Inc., effective immediately.”

The revamped agreement puts those cases to rest and demonstrates how important optical systems–such as digital signal processing, photonic integrated circuit modules, and transceivers for use in networking products and data centers–are for Cisco now and in the future.

Acacia develops, manufactures and sells high-speed coherent optical interconnect products that are designed to transform networks linking data centers, cloud and service providers.

“I am delighted that Cisco and Acacia have decided to come together in this mutual deal,” said Cisco chairman and CEO Chuck Robbins in a statement. “We look forward to welcoming Raj and the Acacia team to Cisco to offer our customers world-class coherent optical solutions to power the Internet for the future.”

“Together we will ignite our strategy to transform the optical world as we know it, with innovative solutions to boost network capacity inside and outside the data center,” said Bill Gartner, senior vice president and general manager, Cisco Optical Systems and Optics Group.