Broadcom Buys Brocade Communications Systems for $5.9 Billion


The merger and acquisition frenzy that dominated October did not end when the calendar flipped to November.

Chip-maker Broadcom is the latest company to join the fray, announcing on Wednesday that it would be acquiring Brocade Communications Systems, a maker of corporate and industrial networking gear. Broadcom will pay $5.9 billion, with the deal expected to close in the middle of next year.

As part of the deal, Broadcom — known for making wireless chips that are found in a variety of devices ranging from cell phones and laptops to TV set top boxes — will divest Brocade’s IP networking business. This includes Ruckus Wireless, a maker of WiFi networking equipment, that Brocade bought earlier this year for $1.2 billion.

“This strategic acquisition enhances Broadcom’s position as one of the leading providers of enterprise storage connectivity solutions to OEM customers,” said Hock Tan, president and CEO of Broadcom, in a statement announcing the deal. “With deep expertise in mission-critical storage networking, Brocade increases our ability to address the evolving needs of our OEM customers.”

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SOURCE: USA Today, Eli Blumenthal