Brocade and Foundry have agreed to amend their July merger agreement to reduce the price Brocade will pay for the network equipment company.
Under the agreement in principle, Foundry's shareholders would be entitled to receive US$16.50(£10) in cash for each share of Foundry common stock. The revised transaction would have an aggregate purchase price of approximately $2.6 billion, still making it one of the biggest technology M&A deals this year.
Initial terms called for Brocade to pay more than $19 per Foundry share, for an aggregate value of $3 billion. The amended agreement comes as the economy continues to decline, bringing down the value of companies with it:
Foundry postponed a shareholder vote on the merger last week, and rescheduled it for this Friday. But that, too, has been postponed until 7 November to allow the companies to finalize the new terms and shareholders to mull the reduced offer.
The companies are combining to compete more effectively with Cisco in the data center.