Terms approved by boards for a deal to compete in a market ‘dominated by a single vendor’
News | 12 Nov 2009 :
HP has announced that it is to acquire network equipment manufacturer 3Com. The $2.7 billion (€1.82 billion) deal has been approved by both boards of directors.
HP says that the move will "will transform the networking industry" and "underscore HP's next-generation data centre strategy built on the convergence of servers, storage, networking, management, facilities and services".
"Companies are looking for ways to break free from the business limitations imposed by a networking paradigm that has been dominated by a single vendor," said Dave Donatelli, executive vice president and general manager, Enterprise Servers and Networking, HP. "By acquiring 3Com, we are accelerating the execution of our Converged Infrastructure strategy and bringing disruptive change to the networking industry. 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 centre."
"Our extensive product line and innovative technology together with HP's breadth and scale will expand our global opportunity," said Bob Mao, chief executive officer, 3Com. "3Com's networking products are based on a modern architecture which has been designed to offer better performance, require less power and eliminate administrative complexity when compared against current network offerings. Our products are enterprise proven and widely deployed in the world's largest banks, manufacturers, Internet service providers, public utilities and retailers."
The acquisition comes over a year after private-equity firm Bain Capital, and Chinese networking provider Huawei, withdrew from a similar bid for $2.2 billion, in what many regarded as the US government expressing concerns over foreign control of key technology providers. In February of 2008, 3Com, Bain and Huawei withdrew their filing to the Committee on Foreign Investment in the United States (CFIUS) as they were "unable to reach a mitigation agreement" with the CFIUS.
Undoubtedly, HP will look to merge 3Com's offerings with its own to provide a range of network equipment that will span from the consumer to enterprise, but it is not clear as yet how Irish customers will be affected. Local representatives from both companies were approached for comment, but neither was able to respond directly at time writing, with HP deferring to corporate communications.