Broadcom Gets Green Light From Feds To Buy San Jose’s Brocade For $5.9 billion

Chipmaker Broadcom on Monday won approval from the U.S. Federal Trade Commission to purchase San Jose-based Brocade Communications Systems for $5.9 billion. From a report: To land U.S. approval, Broadcom had to promise federal regulators not to use information from the acquisition to hurt Cisco Systems. At issue with U.S. regulators was possible impacts on Cisco, since Cisco buys chips from Broadcom, but competes with Brocade. On the flip side, regulators worried Broadcom might use its position as supplier and competitor to raise the prices on fiber channel switches, a niche networking segment that’s owned completely by Brocade and Cisco. To assuage those concerns, Broadcom agreed to set up an operations “firewall” internally, so that competitive information that might hurt Cisco won’t be shared internally. It also agreed to submit to regulatory oversight for five years after the deal is completed.


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