Broadcom and Brocade have agreed to push back the deadline to complete their $5.5 billion proposed merger.
Under the original acquisition agreement, the companies had the option to terminate the deal on Nov. 1 if it hadn’t closed.
Singapore-based Broadcom first announced plans to buy Brocade last November, but the companies have been tied up in regulatory review hurdles, including concerns lodged by the US Federal Trade Commission (FTC) that the acquisition is anticompetitive.
This latest delay is due to a review by the Committee on Foreign Investment in the United States (CFIUS), the government agency that reviews national security implications of proposed foreign investments in US companies. The companies now say the deal should close by Nov. 30 following committee approval.
“We are actively engaged with CFIUS and remain committed to Broadcom’s proposed acquisition of Brocade,” said Brocade CEO Lloyd Carney. “We continue to work diligently and cooperatively with Broadcom to close the transaction as soon as possible in a challenging and dynamic policy and regulatory environment.”
Brocade also announced that it will now directly divest its data center switching, routing, and analytics business to Extreme Networks in lieu of selling the business via Broadcom after the Brocade acquisition is complete.
“We expect this agreement directly with Brocade to accelerate our ability to close our acquisition of the data center business,” says Extreme CEO Ed Meyercord.
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