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Arris’s Proposed Ruckus Wireless Acquisition Hits Another Speed Bump 

Deal, which hinges on Brocade-Broadcom merger, has been delayed again 10/04/2017 9:48 AM Eastern
Image source: Arris

Arris’s proposed acquisition of Brocade’s Ruckus Wireless and ICX switch businesses has hit another snag.

That deal, which hinges on the closing of the merger of Brocade and Broadcom, is in a holding pattern again after Brocade and Broadcom withdrew and refiled their joint voluntary notice to the Committee on Foreign Investment in the United States, following discussion with the CFIUS.

Brocade and Broadcom said the refiling was done to give CFIUS more time to review and analyze the proposed merger. CFIUS has also agreed to proceed directly to a 45-day investigation period, thereby shortening the customary 75-day CFIUS review period, Brocade said.

To allow for that additional time, Brocade and Broadcom also agreed to hold off exercising their right to terminate the merger agreement for failure to close the proposed acquisition by the November 1, 2017 end date under terms of the original agreement.

Brocade and Broadcom said they anticipate the acquisition to be completed by November 30, 2017, subject to clearance from CFIUS.

This follows another CFIUS-related delay that surfaced in July.

How this shakes out is important to Arris, which has agreed to pay $800 million for Brocade’s Ruckus Wireless and ICX switch businesses, a deal that will help to expand and shore up its wireless technology capabilities and product line.

RELATED: Arris Puts Up $800M for Ruckus Wireless, ICX Switch Biz

Arris acknowledged on Tuesday that the notice with CFIUS delays the closure of Arris’s deal, but added that Arris “remains committed to our acquisition and associated strategy.”

“By adding Ruckus, ARRIS will enhance its portfolio of networking technologies to enable constant connectivity in every environment, whether in or outside the home, in commercial verticals or small enterprises. This is an important milestone because our vision of a smart, simple connected world is one step closer,” Arris added.

In related news, Brocade said it has signed an agreement with Extreme Networks to directly divest its data center switching, routing and analytics business. The proposed transaction also hinges on the previously announced sale of that business by Broadcom to Extreme Networks following Broadcom's proposed acquisition of Brocade.

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