Broadcom, a Singapore-based company, known as Avago Technologies, has a vision of becoming a dominant chip supplier. Their product range includes connectivity chips used in products like mobiles to servers.
It’s been more than a year for regulatory approval, but Broadcom has finally accomplished its $5.9 billion acquisition of Brocade Communications. Brocade will now run as an ancillary subsidiary of Broadcom with Jack Rondoni, who was Brocade’s SVP of storage networking, serving as the general manager.
Broadcom CEO Hock Tan quoted that that Broadcom plans to “invest in and grow the Brocade business to further enhance its capabilities in mission-critical storage networking.”
Brocade, California based company, creates networking switches, software and storage products.
After this deal, Broadcom will attract more data center products market share via Brocade’s fiber channel switches that speed up data transfer between servers and storage devices. It also creates opportunities for the chipmakers to learn more about the connected device and vehicle market.
Broadcom initial failed in their unsolicited bid of US$103 billion for Qualcomm, a smartphone chip supplier, but purchased Brocade in November of last year. It also earned the US antitrust approval for the deal in July.
To review their acquisition, both the companies had re-filed their joint voluntary notice to the Committee on Foreign Investment in the United States (CFIUS). Also, Broadcom shares were down 0.8 per cent at US$269.78 during early trade.
Soon after the acquisition, Broadcom announced that they will get rid of its IP networking business, Ruckus Wireless. Howvever, Arris would like to procure Ruckus Wireless and its ICX switch business for $800 million, but the deal became conditional with the Broadcom’s deal with Brocade.
Furthermore, when Broadcom-Brocade acquisition has ended, allowing Arris to close on Ruckus. Arris also mentioned that it expects to close the Ruckus acquisition following the completion of the CFIUS review. The CFIUS investigation period ends Nov. 30.
Most of Brocade’s other IP businesses have also been acquired. Additionally, in the last month, Extreme Networks has also finalized its purchase of Brocade’s data center switching, routing, and analytics business.