COMS reported to have won H-3C for lower price than PE firms bid:
3Com To Buy Huawei's 49% Stake For $882M >COMS
DOW JONES NEWSWIRES
November 29, 2006 7:34 a.m.
By Andrew Simons
Of DOW JONES NEWSWIRES
LOS ANGELES (Dow Jones)--3Com Corp. (COMS) on Tuesday said it agreed to buy Huawei Technologies Co.'s 49% stake in the companies' Huawei-3Com joint venture for $882 million.
The transaction, which is subject to customary approval in China, will give networking company 3Com full ownership of H3C.
"We believe the valuation and the price is fair and has been reached through fair discussions," said Edgar Masri, 3Com's chief executive officer, on a conference call.
The price is less than what other parties were rumored to be bidding.
In October, three U.S. private-equity firms were competing to buy H3C. Huawei invited Silver Lake Partners, Bain Capital Inc. and Texas Pacific Group to bid for the networking joint venture. The private-equity firms' offers ranged from $1 billion to $1.5 billion.
"We are very excited by this transaction and have been working very hard at it," Masri said.
3Com executives declined to comment on how the deal would be financed, but that more details would be available later.
In August, 3Com said it intended to begin negotiations to increase its stake in the venture, with Chairman Eric Benhamou saying H-3C "can be an important cornerstone of 3Com's future."
Closely held Huawei is China's largest maker of telecommunications equipment, with sales of $8.2 billion in 2005. Aided by loans from the Chinese government, the company has expanded rapidly around the globe, taking on Western rivals. |
