The $5.9 billion acquisition of Brocade by Broadcom hit another snag this week. After an initial regulatory delay announced in July, the two companies have now said they are once again refiling with the Committee on Foreign Investment in the US (CFIUS) to allow the agency more time to review the deal. In conjunction with that decision, Broadcom and Brocade have also extended the timeline for their transaction. Previously, both companies had the right to terminate the merger agreement if the deal failed to close by November 1. They are now preparing for a close by November 30.

Both say they are still fully committed to the deal. (See Broadcom Buys Brocade for $5.9B, Will Ditch Ruckus & IP Biz.)

It's not clear why CFIUS needs more time to review the Broadcom/Brocade merger, but the news certainly isn't good for either company or for their customers and partners waiting for some indication of what will happen next. In June, Brocade Communications Systems Inc. (Nasdaq: BRCD) agreed to sell off some of its government contracts to Hitachi Data Systems (HDS) , a move that was presumably designed to assuage CFIUS concerns about foreign control of an American company. (Broadcom Corp. (Nasdaq: BRCM) is incorporated in Singapore.) However, it now appears that that decision may not have been enough to put regulators' minds at ease.

The delay isn't only directly affecting Broadcom and Brocade either. Two additional transactions are tied to the merger's completion. In the first, Extreme Networks Inc. (Nasdaq: EXTR) had planned to buy Brocade's data center switching business contingent on the larger sale to Broadcom. However, Brocade has now announced it is selling its switching division directly to Extreme Networks without waiting for the Broadcom deal to go through.

In the second case, Arris Group Inc. (Nasdaq: ARRS) also agreed to acquire Brocade's Ruckus Wireless assets and its ICX Switch business pending the close of the Broadcom transaction. That $800 million deal remains in a holding pattern, however, until CFIUS decides whether to grant approval for the Broadcom/Brocade merger. In a statement, Arris said, "The refiling of Broadcom's notice with CFIUS delays the closure of ARRIS's deal, but ARRIS remains committed to our acquisition and associated strategy."

For Arris, the acquisition of the Ruckus assets in particular is critical to the company's plan for future growth. The Ruckus portfolio opens up new doors for Arris outside of the cable market in both the wireless industry and in the previously untapped enterprise sector. (See Arris Sees Ruckus Deal Slip to Q4.)

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Concern over foreign control of American companies isn't new, but with anti-globalist sentiment at an all-time high, it may be that Broadcom is running up against more resistance from the US government than it expected. President Donald Trump blocked a deal earlier this year when Canyon Bridge Capital Partners, a Chinese company, tried to buy Lattice Semiconductor Corporation. That acquisition failed due to national security concerns, but it also sparked fears that further regulatory overrides via CFIUS could be forthcoming.

It's impossible to know from the outside whether Broadcom could be another casualty of CFIUS review, but the longer it takes to close the Brocade merger, the more worrisome the prospect becomes. Bland assurances about the deal aside, Broadcom and Brocade recognize that they will have to abide by whatever ruling CFIUS hands down, and that they have limited control over how that decision is made.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading