McData deal wrapped up

Brocade completed its US$713million acquisition of fellow switch maker McData this week.

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By  Administrator Published  February 1, 2007

The merger was approved at the two companies' respective stockholder meetings last week following a decision by the US Federal Trade Commission (FTC) to close its review of the merger on January 23 - signalling the deal could go ahead.

There had been concern that the agreement could be blocked, as the merger would leave networking giant Cisco as the only other major player in the SAN (storage area network) switch and director market.

However, there have been suggestions the deal was approved as a combined Brocade-McData may actually create a more viable rival to Cisco, and therefore a more competitive market.

The combination of Brocade, which focuses largely on providing low-end SAN solutions, and McData, known for making high-end SAN switches, will result in Brocade controlling around 70% of the market, according to US financial analyst firm Robert W Baird.

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