HP to acquire 3Com for $2.7 B in cash, focus on China

HP announced this afternoon that it has entered into an agreement with network switch, router, security, and solutions company 3Com for approximately $2.7 billion in cash.

"By acquiring 3Com, we are accelerating the execution of our Converged Infrastructure strategy and bringing disruptive change to the networking industry," Dave Donatelli, executive vice president and general manager, Enterprise Servers and Networking, HP said today. "By combining HP ProCurve offerings with 3Com's extensive set of solutions, we will enable customers to build a next-generation network infrastructure that supports customer needs from the edge of the network to the heart of the data center."

This acquisition will not only give HP 3Com's property, but also that of network security company TippingPoint and former joint venture with Huawei, H3C.

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HP's announcement put special weight on the H3C aspect of the acquisition, as it will "significantly strengthen the company's position in China -- one of the world's fastest-growing markets -- via the H3C offerings. In addition, the combination will add a large and talented research and development team in China that will drive the acceleration of innovations to HP's networking solutions."

Since buying out Huawei's share of the H3C joint venture, Huawei had an agreement to not compete against 3Com. That agreement, however, expired in 2008 and 3Com has lost a large portion of revenue from strong Huawei's sales (an estimated 17% of its total) in China.

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