It’s official: Broadcom is buying Brocade Communications for $5.9 billion. Broadcom plans to retain Brocade’s Fibre Channel storage area networking (SAN) business. And it would divest Brocade’s IP networking business, including the recently acquired Ruckus Wireless.

The price tag is based on $12.75 per share in an all cash transaction, plus roughly $400 million of net debt.

For Brocade, “this transaction represents significant value for our shareholders, who will receive a 47 percent premium from the Brocade closing share price on Friday, October 28, 2016,” said Brocade CEO Lloyd Carney, in a prepared statement.

Brocade's legacy SAN business had been a drag on the company’s profitability. But Broadcom views the SAN assets as a means to broaden its enterprise storage offerings. The chipmaker says the acquisition would strengthen its portfolio of enterprise storage and networking products, which serve its OEM customers.

Broadcom anticipates that Brocade’s Fibre Channel SAN business will contribute about $900 million of pro forma non-GAAP EBITDA in its fiscal year 2018.

Broadcom plans to divest Brocade’s IP networking business, consisting of wireless and campus networking, data center switching and routing, and software networking. Broadcom made this decision because the IP portfolio overlaps with and competes directly with the IP portfolios of several of Broadcom’s largest customers — Arista, Cisco, and Juniper come to mind.

Carney said Brocade will help Broadcom find a buyer for the IP networking business. It will be interesting to see who picks up those assets.

A research note from RBC Capital Markets this morning projects that Broadcom could get $2 billion for the IP networking assets. That would include Ruckus, for which Brocade paid $1.5 billion less than 12 months ago.

Today’s deal makes investors wonder why Brocade ever bought Ruckus in the first place.

“Having just completed our acquisition of Ruckus, we were confident in our strategy, our team, and our path forward,” Carney writes in a blog entry today. “We were not looking to sell the company. However, when Broadcom approached us with a compelling offer … we concluded that Broadcom’s offer is in the best interests of our company and its shareholders.”

Closing of the transaction is expected to be complete by October 2017.

The companies say it’s too early to tell what organizational changes or layoffs might result from the transaction. But some layoffs seem inevitable. After Avago closed on Broadcom, creating the company currently known as Broadcom, it laid off about 1,900 employees worldwide.

Brocade’s Carney should be in good shape though. He joined Brocade in January of 2013, and according to RBC, he has a compensation package that would garner him about an $18 million payout in a change-of-control scenario.