Brocade’s $5.9 billion acquisition of Broadcom was anticipated to close this summer, but now is expected to close by Nov. 30, subject to clearance from the Committee on Foreign Investment in the United States (CFIUS).
The two companies withdrew and re-filed their joint voluntary notice to CFIUS to allow more time for review and discussion with the committee in connection with the proposed acquisition. CFIUS has agreed to proceed directly to a 45-day investigation period, shortening the customary 75-day review period.
According to the merger agreement, the acquisition was to close by Nov. 1. The agreement remains in full force. The Federal Trade Commission already has approved the deal with certain conditions. Also, China has signed off on the deal.
“We continue to work diligently and cooperatively with Broadcom to close the transaction as soon as possible in a challenging and dynamic policy and regulatory environment,” said Lloyd Carney, Brocade’s CEO.
Also Tuesday, Extreme Networks announced it has signed an agreement with Brocade to purchase the company’s switching, routing and analytics (SRA) data center business for the same terms as the previously announced agreement between Extreme and Broadcom. The transaction is expected to close within 30 days and is subject to the satisfaction or waiver of customary closing conditions.
“We expect this agreement directly with Brocade to accelerate our ability to close our acquisition of the data center business,” said Ed Meyercord, Extreme’s president and CEO. “This is a very positive development for all stakeholders, but especially for customers, partners and employees of Brocade’s data center networking business. Given all of the work that has gone into our business integration planning and our proposed product roadmap, Extreme is now poised to bring this deal over the finish line.”
In July, Extreme completed its acquisition of Avaya’s networking business for about $100 million.
Extreme said its acquisition of Brocade’s data center networking business will strengthen its position in the networking market and expand the company’s portfolio of data center, core, campus and edge networking offerings. As part of the transaction, Extreme will acquire customers, personnel and technology assets from Brocade, further “solidifying Extreme as a top solution provider for enterprises in its target verticals of education, hospitality, health care, retail, transportation and logistics, manufacturing and government,” it said.
In the meantime, Carney said Brocade and Broadcom are actively engaged with CFIUS and remain committed to the acquisition.
“We have completed our planned divestitures of certain software networking assets, lowered our headcount and executed a number of cost-reduction measures,” he said. “With these changes, Brocade is better positioned to continue to benefit from our market-leading position in storage area networking business, and from exciting growth trends in wired and wireless campus networking.”
“We are fully committed to the acquisition of Brocade and are working closely with CFIUS and Brocade to complete this transaction,” said Tom Krause, Broadcom’s chief financial officer..
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February 15 2019 @ 14:45:26 UTC