Editor's note: Acacia Communications is based in Massachusetts. It is not a Chinese company. This article has been corrected.
On Friday, Acacia Communications (NASDAQ:ACIA) terminated its merger agreement with networking equipment giant Cisco Systems (NASDAQ:CSCO). Acacia, which is based in Massachusetts, said the decision, which was effective immediately, is due to the State Administration for Market Regulation (SAMR) in China not approving the deal in time.
Cisco soon responded with a terse press release stating that it was seeking confirmation from the Delaware Court of Chancery that all conditions have, in fact, been met. These include SAMR's approval, which Cisco claims it received on Thursday, Jan. 7.
Cisco said it "is also seeking a court mandate that the agreement may not be terminated until the court resolves these matters, and an order from the court requiring Acacia to close the transaction."
In its press release, Acacia -- a maker of optical networking technologies -- essentially said it would contest this move.
The deal was originally announced in July 2019, with the two companies agreeing that Cisco would pay $70 per share for Acacia in an all-cash deal valued at $2.6 billion. Back then, the price represented a 46% premium to Acacia stock's value prior to the announcement.
At the time, Cisco General Manager of Networking and Security Business David Goeckeler said that owning Acacia "will allow us to build on the strength of our switching, routing, and optical networking portfolio to address our customers' most demanding requirements."
It would also give it a direct connection to the massive Chinese market. Its sales in the country have been relatively limited, and it is generally struggling with growth.
On Friday, Acacia stock raced to close nearly 10% higher, with Cisco flatlining on the day.