Huawei exits Huawei-3Com JV for US$882 million
Huawei will continue to comply with its commitments under the existing joint venture agreements. Late last year, though, 3Com made its first moves to take control of the company, paying US$28 million for an additional 2% stake owned by Huawei.
Chinese manufacturer Huawei Technologies has announced that it has accepted a bid offer from 3Com to purchase its entire stake in their joint venture Huawei-3Com. 3Com will pay US$882 million to buyout Huawei’s 49% stake in their Chinese joint venture, valuing all of Huawei-3Com at US$1.8 billion.
In accordance with Huawei-3Com’s shareholders’ agreement, the bid process was initiated by 3Com on November 15 and Huawei accepted a bid offer on November 28. Huawei-3Com will become wholly owned by 3Com after the completion of the transaction.
“The divestment will further enable Huawei to focus its efforts on its core business, strengthen our leadership position in the all IP-based fixed and mobile convergence solutions market, and create long-term value and potential growth for our clients,” commented Guo Ping, senior vice president of Huawei Technologies. “Over the past three years, 3Com and Huawei have contributed a great deal to the development of Huawei-3Com.
Huawei will continue to comply with its commitments under the existing joint venture agreements. Late last year, though, 3Com made its first moves to take control of the company, paying US$28 million for an additional 2% stake owned by Huawei. That gave 3Com majority control and allowed it to appoint five directors to the Huawei-3Com board of directors while Huawei had four slots.
Huawei-3Com is a leading global supplier of IP networking products and solutions, with offerings including routers, Ethernet switches, wireless LAN, security, voice/video over IP products, SOHO products and network management systems.