HP To Acquire 3Com
Posted on: Thursday, 12 November 2009, 10:45 CST
Hewlett-Packard Co has announced it will acquire 3Com Corp in a $2.7 billion deal that is being seen as a direct threat to Cisco Systems.
3Com manufactures devices for Internet connections, such as routers and Ethernet switches.
HP said it would pay $7.90 per share of 3Com, as well as a 39 percent premium to the company’s closing stock price.
HP said the deal is expected to be completed during the first half of 2010, if approved by regulators.
“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, HP’s executive vice president and general manager, Enterprise Servers and Networking.
“By acquiring 3Com, we are accelerating the execution of our converged infrastructure strategy and bringing disruptive change to the networking industry.”
"Our extensive product line and innovative technology together with HP's breadth and scale will expand our global opportunity," said 3Com chief executive Bob Mao.
"Our products are enterprise proven and widely deployed in the world's largest banks, manufacturers, Internet service providers, public utilities and retailers."
Furthermore, HP said the acquisition would “significantly strengthen the company’s position in China – one of the world’s fastest-growing markets.”
According to the Associated Press, 3Com earns more than half of its $1.3 billion annual revenue from China.
“Based on our experience and extensive testing of 3Com’s products, we are planning to undertake a global rollout within HP as soon as possible after the completion of the acquisition,” said Randy Mott, HP’s executive vice president and chief information officer.
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Source: RedOrbit Staff & Wire Reports
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