US: Cisco acquires Acacia for $2.6 billion

Network gear maker Cisco Systems said on Tuesday it would buy optical component maker Acacia Communications Inc for $2.84 billion in cash, as it seeks to garner a bigger chunk of 5G spending by telecom companies.

Globally, mobile networks would need higher-capacity optical interfaces to handle a surge of data when high-speed fifth-generation network comes on line in the next few years.

Morningstar analyst Mark Cash said the acquisition will bolster Cisco’s technology for service providers upgrading to 5G and put its optical portfolio ahead of the shift toward using plug and play devices across various communication segments.

According to Cisco’s Visual Networking Index, global internet traffic is projected to more than triple to 13.2 exabytes per day in 2022 from 4.1 exabytes per day in 2017.

“Cisco’s optical portfolio was mainly for short range data center connections, and now gains Acacia’s skill set in areas such as metro, long-haul, and undersea,” Cash said.