Taking over the sudden flurry of murmurs in the tech industry, Broadcom has come under a strategic acquisition deal with Brocade Communications System for a whopping $5.5 billion in cash. Learned to expand its networking storage business, Broadcom formerly named Avago is affluent for its connectivity chips, while California-based Brocade makes networking hardware, software and storage products.
“This strategic acquisition enhances Broadcom’s position as one of the leading providers of enterprise storage connectivity solutions to OEM customers,” Broadcom Chief Executive Hock Tan said in a statement.
According to Reuters, Broadcom plans to divest Brocade’s IP networking business, consisting of wireless and campus networking, data center switching and routing, and software networking solutions.
A big part of Brocade’s IP networking business that Broadcom plans to divest was acquired as part of Brocade’s $1.5 billion acquisition of Ruckus Wireless earlier this year. This unit generated $209 million in product revenue in the third quarter.
“We will work with Broadcom as it seeks to find a buyer for our IP Networking business,” Brocade Chief Executive Lloyd Carney said in a statement.