Broadcom is indeed acquiring Brocade

The new entity will seek to sell Ruckus Wireless IP networking business, acquired in April

Tags: Broadcom (broadcom.com/)USA
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Broadcom is indeed acquiring Brocade Agreement to acquire Brocade by Broadcom will cost 5.9 Billion dollars in cash and debt.
By  David Ndichu Published  November 3, 2016

Chipmaker Broadcom has reached an agreement to acquire networking equipment vendor Brocade for 5.9 Billion dollars in cash and debt.

Yesterday, we reported on unconfirmed reports that a deal was in the works that would see Broadcom more effectively shift to converged and software-defined data centres.  

The Broadcom purchase is centred on Brocade’s storage area network (SAN) business, which provides data storage solutions for enterprises.

Broadcom plans to divest Brocade’s IP Networking business, which consists of campus networking, data centre switching and routing and wireless networking solutions businesses. The wireless business was acquired as part of Brocade’s acquisition of Ruckus Wireless earlier in the year, and will be unloaded ostensibly to prevent competitive overlap.

Broadcom’s integration of Brocade’s Fibre Channel SAN capabilities would improve its ability to compete with semiconductor vendors such as NVIDIA and Qualcomm and enable it to capitalize on burgeoning trends such as AI that require more agile and comprehensive storage connectivity, says Krista Macomber, senior analyst, data centre at  research and consulting firm TBR.

Brocade’s IP Networking business represents a mature organisation with established, proven brand cachet and large market share. As a result, TBR believes it would be a viable candidate for acquisition by the likes of Dell or Nokia, Macomber says.

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