Network Computing is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Brocade-McData Draws Extra Scrutiny

Wall Street analysts say the government is keeping a close eye on Brocade's planned acquisition of switch rival McData, and the Federal Trade Commission is considering taking action to stop it. (See Brocade Bags McData For $713M.)

Sources say they expect the deal to go through but there is enough resistance within the FTC to make investors nervous. The FTC is the U.S. government agency charged with preventing anti-competitive business practices.

Under questioning at the Needham & Co. investor conference in New York today, Brocade executives insisted they expect the proposed $713 million deal would win government approval. Brocade and McData shareholders will vote on the acquisition Jan. 25.

"We believe it will go through, as early as the end of this month," Brocade marketing VP Tom Buiocchi says. "We believe [the FTC] will determine the transaction is good for both customers and shareholders."

Brocade revealed in November that the FTC issued a second request for information about the deal because of concerns over diminished competition in the Fibre Channel switch market. Despite Brocade's public confidence, the word on Wall Street is the deal is no slam dunk.

  • 1