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4/12/2010
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HP Completes $2.7 Billion 3Com Acquisition

The deal strengthens HP's Converged Infrastructure strategy and its China business as well as its competitive position against Cisco.

In a move that strengthens its networking offerings and its presence in China, HP announced Monday that it has completed its acquisition of 3Com Corporation for $2.7 billion.

HP said the acquisition will create a comprehensive customer portfolio by integrating 3Com's networking switching, routing and security solutions into HP's ProCurve Solutions. The expanded product lineup beefs up HP's Converged Infrastructure strategy, which is centered on the integration of servers, storage, networking, management facilities and services, HP said.

"With this integration," HP said in a release, "customers will be able to simplify their networks, deploy an edge-to-core network fabric for the enterprise and improve IT service delivery capabilities."

HP noted that the 3Com acquisition strengthens its China business. Conversely, the acquisition will likely give China's networking giant Huawei Technologies an improved portal into U.S. companies. 3Com and Huawei have had longtime partnerships generating business in each other's native country. In its second quarter financial report, 3Com said its sales to Huawei were $18.2 million while its China-based sales were $151 million.

3Com underwent a series of Byzantine financial efforts involving Huawei and Bain Capital Partners in unsuccessful attempts to restructure 3Com's partnership with Huawei before the HP deal.

In its announcement Monday, HP noted that the 3Com acquisition will expand its routing and Ethernet switching capabilities. HP added that HP's TippingPoint intrusion prevention solution will improve HP's network security offerings.

The 3Com acquisition is also likely to strengthen HP's competitive position against Cisco as the latter moves into traditional HP services and data center territories.

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