Menu
3Com still seeking Huawei deal

3Com still seeking Huawei deal

3Com, Bain and Huawei have not yet reached an acquisition deal that would meet U.S. security concerns.

3Com and its partners in a proposed acquisition haven't yet reached a deal that they believe would ease U.S. government concerns about national security.

The networking vendor, which makes some intrusion-detection products used by the U.S. government, agreed last September to be acquired by Bain Capital, a Boston-based investment company, and Huawei Technologies, a networking vendor owned in part by the Chinese government. The Committee on Foreign Investment in the United States (CFIUS) rejected that plan, the companies announced in late February.

At that point, 3Com said it would work with Bain and Huawei to come up with a deal that would pass muster.

"To date, the parties have been unable to agree upon an alternative transaction that addresses CFIUS's concerns and is acceptable to 3Com's Board of Directors," 3Com said in a statement on Wednesday. The company remains committed to looking for ways to close the proposed US$2.2 billion deal, but also confident in its own long-term prospects, President and CEO Edgar Masri said in a statement.

The disclosure came as 3Com said it would go forward with a scheduled shareholder vote on the deal Friday in order to meet its commitments under the existing merger agreement. The 3Com board of directors still recommends that shareholders vote in favor of the merger.

Although Bain would hold 83.5 percent of 3Com under the deal, with Huawei controlling just 16.5 percent, the proposal raised concerns about foreign control of sensitive security technologies. 3Com is a relatively small player in networking and has long sought angles to compete against the dominant Cisco Systems. In 2003, it formed a joint venture with Huawei to make enterprise networking gear for worldwide sale and to gain a foothold in the Chinese market. In 2006, it bought out Huawei's 49 percent stake in that venture.


Follow Us

Join the newsletter!

Error: Please check your email address.

Featured

Slideshows

A snapshot of the Kiwi partners set to shine at the Reseller News Awards

A snapshot of the Kiwi partners set to shine at the Reseller News Awards

With the 2017 Reseller News ICT Industry Awards only weeks away, Reseller News profiles the power line-up of partners set to dominate the biggest night on the channel calendar. ​Ranging from the enterprise, down through the mid-market and small business sectors into the heart of the start-up scene, the end result is the most diverse and wide-ranging partner line-up in the history of the Awards, playing host to the leading innovators of the past 12 months.​

A snapshot of the Kiwi partners set to shine at the Reseller News Awards
Channel celebrates as HP marks 50 years in NZ

Channel celebrates as HP marks 50 years in NZ

HP marked 50 years in New Zealand at an event in the vendor's Auckland's headquarters last night, with a host of key channel figures coming along to celebrate. Photos by HP.

Channel celebrates as HP marks 50 years in NZ
Show Comments