FTC Gives Broadcom Antitrust Consent to Buy Brocade

Jul 03, 2017

Chipmaker Broadcom has won U.S. antitrust approval to buy Brocade Communications Systems, the Federal Trade Commission said on Monday.

The $5.5 billion deal, which already has won approval in Europe and Japan, is the latest in the chip industry as companies bulk up in response to growing demand for chips in connected devices and cars.

As a condition of approval, Broadcom agreed to build a firewall to prevent the merged company from using information it gains as Cisco's supplier to compete in selling the switches as Cisco's competitor, the FTC said.

Get Data Sheet, Fortune’s technology newsletter.

Broadcom (brcm) supplies Cisco (csco), and Brocade (brcd) competes with Cisco, in making fiber channel switches that transfer large amounts of data between servers and other devices, the FTC said.

Broadcom agreed that the business group which supplies Cisco would work from separate facilities and that a firewall would prevent the use of Cisco's information for any purpose other than supplying Cisco, the FTC said.

Broadcom had no immediate comment. Brocade did not immediately respond to a request for comment.

The deal was announced in November.

Singapore-based Broadcom, formerly Avago Technologies, is known for its connectivity chips used in products ranging from mobiles to servers, while California-based Brocade makes networking switches, software and storage products.

All products and services featured are based solely on editorial selection. FORTUNE may receive compensation for some links to products and services on this website.

Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. Dow Jones Terms & Conditions: S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions