Broadcom has announced that it will buy networking firm Brocade in a deal valued at $5.9bn, as the company looks to strengthen its presence in the storage hardware sector.
Brocade specialises in fibre channel storage area network switching, which is a $1.5bn business for the company, and IP networking. Its technology will broaden Broadcom's data centre offerings in this area.
However, the joint statement from the companies indicates that Broadcom will look for a buyer for Brocade's IP networking business, which is largely based on Brocade's $1.5bn purchase of Ruckus Wireless earlier this year.
"We will work with Broadcom as it seeks to find a buyer for our IP networking business which includes a full portfolio of open, hardware- and software-based solutions spanning the core of the data centre to the network edge," said Brocade CEO Lloyd Carney.
Broadcom CEO Hock Tan described the purchase as a "strategic acquisition" that will enhance Broadcom's position as "one of the leading providers" of enterprise storage connectivity solutions to OEM customers.
"With deep expertise in mission-critical storage networking, Brocade increases our ability to address the evolving needs of our OEM customers," he added.
"In addition, we are confident that we will find a great home for Brocade's valuable IP networking business that will best position that business for its next phase of growth."
Avago bought Broadcom last year for a huge $37bn, and retained the name as it looked to gain a stake in all major networking spheres.
Broadcom focuses on four primary markets: wired infrastructure, wireless communications, enterprise storage and the industrial sector.
The company's products are used in data centre networking, telecoms, broadband access, smartphones, mobile base stations, power generation and alternative energy systems.
The acquisition of Brocade comes just days after smartphone chip maker Qualcomm agreed a $47bn purchase of NXP Semiconductors.
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