Shareholders of Brocade will receive a 47 percent premium from the Brocade closing share price on Friday, October 28, 2016. Sources reported on Tuesday that a Broadcom-Brocade deal was imminent.īroadcom said it would take on about $400 million of Brocade’s debt and fund the deal with available cash and debt.Įvercore was Brocade’s financial adviser.“This strategic acquisition enhances Broadcom’s position as one of the providers of enterprise storage connectivity solutions to OEM customers,” said Hock Tan, president and CEO of Broadcom. The IP networking business makes controllers and access points that help businesses offer high-speed internet to their customers. The unit generated $209 million in product revenue in the third quarter. “I don’t think there will be a lack in buyers for the IP business,” analyst Acree said, adding that several companies such as Cisco, Hewlett Packard Enterprise and Chinese firms were trying to make headway in the space.Ī 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.
The Qualcomm-NXP deal topped Avago’s $37 billion acquisition of Broadcom Corp last year that formed Broadcom Ltd.īroadcom’s top customers include Cisco Systems Inc, Hewlett Packard Enterprise and Intel Corp.īroadcom will sell Brocade’s IP Networking business due to competitive overlap with some of its most important customers, Brocade Chief Executive Lloyd Carney said in a blog post.īrocade’s IP networking business consists of wireless networking, data center switching and software networking solutions. In the biggest chip deal ever, smartphone chipmaker Qualcomm Inc agreed last week to buy NXP Semiconductors NV for about $38 billion, making it the leading supplier to the fast-growing automotive chips market. Since taking over the top job at Avago a decade ago, Chief Executive Hock Tan has turned around a small chipmaker into a giant with a market capitalization of $67 billion. The chip industry has been undergoing rapid consolidation as companies try to capture market share, much of it related to connected devices and cars, and Avago/Broadcom has been one of the sector’s most prolific acquirers. Up to Tuesday’s close, Brocade’s shares had gained nearly 30 percent since Bloomberg reported on Monday that the company was in talks to sell itself. Brocade’s shares were trading up 9 percent at $12.25, while Broadcom’s stock rose 1.5 percent to $171.41.
0 kommentar(er)
