Brocade Communications Systems Inc. said late Tuesday the closing of its deal with Broadcom Ltd. has been delayed to give a U.S. government inter-agency committee more time to go over the proposed deal. Broadcom agreed to buy Brocade last year, and shareholders approved the deal in January. Earlier this week, however, following discussions with the U.S. Committee on Foreign Investment, the companies agreed to withdraw and re-file a voluntary notice to the committee to allow more time for a review. Once the committee accepts the notice, a new 30-day review period will start, and that may be followed by a 45-day investigation period, Brocade said. Shares of Brocade rose 0.2% in late trading and ended the day down 0.5%; shares of Broadcom rose 0.5% in the late session and ended the regular session up 0.8%. "Brocade and Broadcom have been and will continue to be actively engaged with CFIUS during its review of the proposed acquisition. There can be no assurances, however, that CFIUS will ultimately agree that the parties may proceed with the proposed acquisition," they said. The delay also affects Extreme Networks Inc. , which had agreed to buy Brocade's data-center networking business from Broadcom. Extreme said in a statement it expects to close its transaction with Broadcom within two to three business days of the completed acquisition of Brocade by Broadcom.
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