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Chipmaker Broadcom to Acquire Network Vendor Brocade for $5.9 Billion

Chipmaker Broadcom to Acquire Network Vendor Brocade for $5.9 Billion Image Credit: Brocade

Leading chip maker, Broadcom has entered into an agreement to acquire Broadcom, a leader in Fibre Channel storage area network switching and IP networking, for approximately $5.5 billion in cash.

Under the terms of the deal, Broadcom said that Brocade investors would receive $12.75 a share in cash, a 47 percent premium to the Brocade’s closing price on Friday.

The deal set out to build a new type of networking company for the digital era, one that stretches from the core of the data center to the wireless edge, and that remakes the network into a platform for rapid service delivery and business innovation.

Broadcom, with the support of Brocade, plans to divest Brocade’s IP Networking business, consisting of wireless and campus networking, data center switching and routing, and software networking solutions, to avoid competing with its top customers such as Cisco Systems.

Hock Tan, President and Chief Executive Officer of Broadcom
With deep expertise in mission-critical storage networking, Brocade increases our ability to address the evolving needs of our OEM customers. In addition, we are confident that we will find a great home for Brocade’s valuable IP networking business that will best position that business for its next phase of growth.

Lloyd Carney, Chief Executive Officer of Brocade
Our best-in-class FC SAN solutions will help Broadcom create one of the industry’s broadest portfolios for enterprise storage. We will work with Broadcom as it seeks to find a buyer for our IP Networking business which includes a full portfolio of open, hardware and software-based solutions spanning the core of the data center to the network edge.

Author

Ray is a news editor at The Fast Mode, bringing with him more than 10 years of experience in the wireless industry.

For tips and feedback, email Ray at ray.sharma(at)thefastmode.com, or reach him on LinkedIn @raysharma10, Facebook @1RaySharma

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