Wednesday, 3 October 2007

Huawei, Investment Firm Buy 3Com In USD 2.2B Deal

3Com has announced that it has agreed to be acquired by a unit of investment firm Bain Capital and Chinese telecom and networking company Huawei in a USD 2.2 billion deal....

3Com has announced that it has agreed to be acquired by a unit of investment firm Bain Capital and Chinese telecom and networking company Huawei in a USD 2.2 billion deal. Huawei will be just a minor partner in the deal.

3Com also said that China-based Shenzhen Huawei Investment & Holding would become "a commercial and strategic partner."

The USD 2.2 billion price tag for 3Com represents a 44 per cent premium over the company's closing stock price last week. Boston-based Bain Capital expects to close the deal by next year's first quarter, subject to approval by 3Com's shareholders and government regulators.

"We believe that this agreement better positions 3Com to establish itself as a global networking leader, which will benefit our employees, our customers, and our partners," said 3Com president Edgar Masri.

By becoming a private company, said Masri, "we will be able to increase our focus on our long-term strategic objectives rather than the intensive quarterly focus required of publicly traded companies. Management can make crisp decisions without worrying about the short-term impact on the stock."

"We believe the new ownership structure will help 3Com to improve its business operations, provide better products and services, and bring more value to its customers," said Huawei chief executive Ren Zhengfei.

3Com makes data network switches, security appliances, and Internet Protocol-based telephone equipment. Once a world leader in networking technology, the company has never fully recovered from the collapse of the Internet boom of the late 1990s.