Acacia Communications filed a countersuit against Cisco in the ongoing battle over the companies’ $2.6 billion merger.

Cisco originally announced plans to acquire the small optical firm in July 2019, and at the time expected the deal to close by the end of the year. However, the deal stalled after the Chinese government’s State Administration for Market Regulation (SAMR) refused to approve the acquisition.

Late last week, Acacia said it terminated the acquisition because China didn’t greenlight it by Jan. 8 . Cisco, however, said it did receive Chinese approval on Jan. 7 and filed a lawsuit to force Acacia to close the deal.

On Monday, Acacia filed its response and a clounterclaim against Cisco in the Delaware Court of Chancery. The optics vendor argues that the Jan. 7 email from a SAMR employee that said Cisco’s submission was “sufficient to address the relevant competition concerns” does not constitute regulatory approval.

“Acacia intends to vigorously defend itself against Cisco’s claims,” Acacia CEO Murugesan Shanmugaraj said on Monday during a call with investors. “And earlier today, we filed counterclaims in that litigation, asserting that Acacia's termination of the merger agreement was fully justified.”

Cisco declined to comment on Acacia’s countersuit by press time.

If the Delaware court sides with Acacia and allows the optics vendor to kill the merger, it will deliver a big blow to Cisco’s larger 5G strategy.

Acacia, which is an existing Cisco supplier, makes high-speed coherent optical interconnect products for webscale companies, service providers, and data center operators. Cisco already uses its technology in some of its optical systems and routers, but the acquisition would bring Acacia’s technology — and optics revenue — in house.

“The market that Acacia plays in for coherent technology is a multi-billion market,” said Bill Gartner, SVP and GM of Cisco’s Optical Systems and Optics Group, in an interview with SDxCentral in July 2019. “We are a relatively small player in that market, but we think this expands the opportunity for optical systems.”

Cisco provided more details about the important role optics, and specifically Acacia, would play in its service provider strategy at its boldly named Internet for the Future event in December 2019. At the event, Cisco CEO Chuck Robbins announced his company’s three-part strategy targeting service providers and their 5G rollouts. Optics technology comprised the third pillar.

In a separate interview with SDxCentral later that month, Jonathan Davidson, SVP of Cisco’s service provider networking business, said that operators need to build new backhaul infrastructure to carry 5G traffic, and Cisco is targeting that space with its routers and optics including Acacia’s technology.