SAN JOSE, CA--(Marketwired - Oct 3, 2017) - Brocade® (NASDAQ: BRCD) today announced that, following discussions with the Committee on Foreign Investment in the United States ("CFIUS"), Brocade and Broadcom Limited withdrew and re-filed their joint voluntary notice to CFIUS to allow more time for review and discussion with CFIUS in connection with the proposed acquisition of Brocade by Broadcom. CFIUS has agreed to proceed directly to a 45-day investigation period, thereby shortening the customary 75-day CFIUS review period.
To allow for the additional CFIUS review period, on October 2, 2017, Brocade and Broadcom agreed to refrain from exercising their right to terminate the merger agreement for failure to close the proposed acquisition by the November 1, 2017 end date under the merger agreement. The merger agreement remains in full force and effect. Brocade and Broadcom now anticipate the acquisition to be completed by November 30, 2017, subject to clearance from CFIUS.
Brocade also announced that it has signed an agreement with Extreme Networks to directly divest its data center switching, routing and analytics business. The proposed transaction would be completed in lieu of the previously announced sale of that business by Broadcom to Extreme Networks following Broadcom's proposed acquisition of Brocade. Brocade and Extreme Networks presently expect to close this transaction prior to the closing of Broadcom's acquisition of Brocade, subject to the satisfaction or waiver of customary closing conditions. The transaction does not require shareholder approval by either company, and is not subject to any financing condition.
"We are actively engaged with CFIUS and remain committed to Broadcom's proposed acquisition of Brocade," said Lloyd Carney, CEO of Brocade. "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. In the meantime, we are pleased to announce an agreement to divest our data center networking business to Extreme Networks, which we believe is in the best interest of our shareholders, customers, partners and the employees aligned with the business."
"Over the past year, we have taken a number of important steps to align our overall business and cost structure with changing business conditions," Carney continued. "We have completed our planned divestitures of certain software networking assets, lowered our headcount and executed a number of cost-reduction measures. With these changes, Brocade is better positioned to continue to benefit from our market-leading position in storage area networking business, and from exciting growth trends in wired and wireless campus networking."
"We are fully committed to the acquisition of Brocade and are working closely with CFIUS and Brocade to complete this transaction," stated Tom Krause, Chief Financial Officer of Broadcom.