3Com Stock Down After Huawei Deal - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Infrastructure

3Com Stock Down After Huawei Deal

3Com agreed to pay $882 million for Huawei's 49% stake in Huawei-3Com.

As the successful bidder in the process to take ownership of networking provider Huawei-3Com Ltd., 3Com learned that the spoils don't always go to the victor: 3Com's stock dropped sharply in an indication that investors don't like the deal.

3Com agreed to pay $882 million for Huawei's 49% stake in the joint company, disappointing investors who had been hoping private equity firms would bid more for the stake. In Wednesday trading, 3Com shares fell 35 cents, or 7.8%.

Edgar Masri, president and CEO of 3Com, praised the acquisition. "H3C has proven to be a well-established, standalone business with substantial market share in China and strong potential to expand globally We are very excited at the prospect of owning 100% of the venture."

Private equity firms were circling H3C, but, in the end, they couldn't acquire the company. Because 3Com and Huawei had an existing agreement to permit either party to buy out the other, 3Com's $882 million offer prevailed. The deal must still be approved by the government of China.

H3C and 3Com could end up competing with each other in the future, although a noncompete provision agreed to by the two firms will be in force for 18 months.

Masri said he looks forward to having Huawei as a customer.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Slideshows
IT Careers: 12 Job Skills in Demand for 2020
Cynthia Harvey, Freelance Journalist, InformationWeek,  10/1/2019
Commentary
Enterprise Guide to Multi-Cloud Adoption
Cathleen Gagne, Managing Editor, InformationWeek,  9/27/2019
Commentary
5 Ways CIOs Can Better Compete to Recruit Top Tech Talent
Guest Commentary, Guest Commentary,  10/2/2019
White Papers
Register for InformationWeek Newsletters
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
Video
Current Issue
Data Science and AI in the Fast Lane
This IT Trend Report will help you gain insight into how quickly and dramatically data science is influencing how enterprises are managed and where they will derive business success. Read the report today!
Slideshows
Flash Poll