Broadcom plans to buy network gear maker Brocade for $5.5 billion


Chipmaker Broadcom Ltd is to buy network gear maker Brocade Communications Systems Inc for $5.5 billion in cash and debt.

Earlier today, chipmaker company Broadcom Ltd has announced that it has successfully negotiated an acquisition deal with network gear maker Brocade Communications Systems Inc for the purchase of Brocade for $5.5 billion in cash.

Broadcom, a Singapore-based company formerly known as Avago, is renown for its connectivity chips, while California-based Brocade is known for its networking hardware, software and storage products. Customers use Brocade’s fiber channel protocol-based networking products to build storage area networks within their data centers.

Broadcom has stated that it planned to divest Brocade’s IP networking business, consisting of of wireless and campus networking, data center switching and routing as well as software networking solutions. A large part of this IP network business Brocade acquired as part of a $1.5 billion acquisition deal with Ruckus Wireless earlier this year.

Broadcom has also added that it would take about $400 million of Brocade’s debt and fund the deal with available cash and debt. The $12.75 per share offer represents a premium of 46.7 percent to Brocade’s close on Friday. Brocade shares had gained nearly 30 percent since the takeover report appeared on Monday..

About the Author

Zhivko Stanev
My name is Zhivko Stanev and work as co-chief editor at Business News Feeds. I'm writing for business news, mergers and acquisitions and employment for Asia, Northern Europe and Africa.

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