Wow…it is turning out to be a big Merger Monday. First Roche decides to try and pick up the part of Genentech it doesn’t already own for a whopping $43.7 billion. And now there is news that Brocade, a old school storage networking vendor, is buying Foundry Networks for $3 billion. Foundry is well known for its switches and other data networking products.

Under the agreement, Brocade will pay a combination of $18.50 of cash plus 0.0907 shares of Brocade common stock in exchange for each share of Foundry common stock,
representing a total value of $19.25 (based on Brocade’s closing stock price on Friday, July
18, 2008 of $8.27). The acquisition is expected to close in the fourth quarter of calendar year 2008.

This marriage is akin to a wedding of 50-year-old divorcees — finally realizing that love would need a new meaning. Both companies came of age in the late 1990s and were stock market darlings before losing a lot of their respective fizz. Brocade made its bones as a fiber channel network provider, but lately the world of storage is moving towards high-speed Ethernet based storage. It’s a very realistic deal between two companies that are always in the crosshairs of Cisco Systems (CSCO).

“We believe the industry is at an inflection point in the way enterprise and service provider networks and data centers are being architected,” said Mike Klayko, CEO of Brocade. “Brocade has taken an important step through this acquisition in developing a networking infrastructure strategy that will serve as the foundation for capitalizing on these dynamic opportunities.” I wonder what role Bobby Johnson, CEO of Foundry, will play in the new company!