Broadcom Ltd. Nov. 2 said it would acquire storage and networking supplier Brocade Communications Systems Inc. in a deal valued at $5.9 billion.
Chip-maker Broadcom said it will keep Brocade’s Fibre Channel and storage area networking line but will sell the company’s IP networking business, which includes routing, switching and wireless technologies that it just recently acquired from Ruckus Wireless.
“This strategic acquisition enhances Broadcom’s position as one of the leading providers of enterprise storage connectivity solutions to OEM customers,” said Hock Tan, Broadcom’s CEO, in a statement. “With deep expertise in mission-critical storage networking, Brocade increases our ability to address the evolving needs of our OEM customers. In addition, we are confident that we will find a great home for Brocade’s valuable IP networking business that will best position that business for its next phase of growth.”
Since acquiring Foundry Networks eight years ago, Brocade has struggled to carve a significant niche in the enterprise networking market. Broadcom is selling the IP business in part so that its current relationship with networking customers that buy its chips–which include Cisco and Juniper–won’t be imperiled.
Broadcom said the transaction is expected to close in mid-2017.