San Jose’s Cisco Systems receives China approval on $4.5bn Acacia takeover



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San Jose’s Cisco Systems receives China approval on $4.5bn Acacia takeover

On Tuesday, China’s anti-trust watchdog had cleared the American multinational networking hardware industry behemoth Cisco Systems Inc’s $4.5 billion acquisition deal for Acacia Communications Inc, though the Chinese market regulators had also cautioned the companies must ensure fair competition.

In point of fact, one of the world’s largest network gear manufacturer, Cisco, had first expressed its intent to purchase the optical component manufacturer Acacia back in the 2019s, largely aimed at slicing a larger bite in telecom businesses, while shortly after the companies had agreed to a $4.5 billion merger, the US anti-trust authorities had also greenlighted the deal.

Besides, in the second-half of a pandemic-battered 2020, Cisco said in a statement that an approval from China’s State Administration for Market Regulation’s (SAMR), had been the only remaining to close out the deal.

Cisco set to conclude Acacia takeover deal after SAMR nod

Meanwhile, clearing a last obstacle for Cisco’s $4.5 billion Acacia purchase, SAMR, which holds authority to block out a deal similar to EU Commission alongside US FCC (Federal Competition Commission), was quoted saying in a statement that the Acacia acquisition could proceed, since the companies agreed to serving their existing contracts in China and had pledged to continue supplying Chinese customers “in accordance with the principles of fairness, reasonableness and non-discrimination”.

If truth is to be told, latest approval from SAMR on an Acacia takeover deal by a US-based entity had surprized many, as China had previously blocked a number of acquisition attempts, while the Singapore-based semiconductor industry giant Broadcom had also withdrawn its Qualcomm takeover bid following a warning from President Donald Trump that the deal would proffer an upper hand to Beijing.

Nonetheless, China’s anti-trust watchdog had approved two smaller overseas takeover deals last year in a fiercely politicized semiconductor industry, while Infineon Technologies had taken over a US-based chipmaker Cypress Semiconductor at a $10 billion buyout deal.