Cisco build 5G muscle with $2.8 billion acquistion

Network gear maker Cisco Systems Inc 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.