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Cisco Gets Conditional Approval From China for Acacia Deal

  • Cisco had raised its offer for Acacia following legal dispute
  • Approval is conditional on supply to Chinese customers

China’s State Administration for Market Regulation issued a conditional approval of Cisco Systems Inc.’s purchase of Acacia Communications Inc., removing a regulatory hurdle that had nearly torpedoed the deal.

The approval is conditional on the companies agreeing to continue to honor contracts with existing clients in China for the next five years from the effective date, the regulator said in a release dated Jan. 14 and posted on its website on Tuesday. Among other requirements, the combined entity should continue to provide Chinese customers with access to its products “based on the principles of fairness, reasonableness and non-discrimination,” according to the statement.

Last Thursday, Cisco raised its offer for Acacia by more than 70% to close a deal that the target company had tried to walk away from. The two firms had been in a legal dispute after Acacia canceled the deal because it said Cisco didn’t get sign-off from Chinese regulators ahead of a Jan. 8 deadline for closing the transaction.

Read more: Cisco Lifts Acacia Bid to $4.5 Billion to Clinch the Deal