I’m speechless..................
The cabin is starting to look good too.
This brings to mind the Jim Belushi sketch on Saturday Night Live “Chess Coach”...
“Why don’t you just GIVE him the queen...”
Followed by a thrown chair. Sorry...I am so aghast at this that all I can do is look for something humorous...
Hua Wei stole designs from Cisco - but was never punished in any way for it.
There is a need of law to ban such merge.
I respect Bill Gertz a lot, but this is much ado about nothing.
3Com (NYSE:COMS), founded in 1979 by Ethernet inventor and pioneer Bob Metcalfe, and Huawei Technologies Co. set up a joint venture called H-3C in 2003, with 3Com owning at first 49% of H-3C, later buying 2% to give it a majority ownership (51%) in H-3C. In March 2007, 3Com closed the purchase of Huawei’s remaining 49% interest in H-3C for $882 million (including $430M secured bank loan), giving COMS full ownership of the joint venture, named H-3C Technologies Co. Limited. Rumors of private equity buying 3Com and H-3C were going back to September 2006, with potential buyers expected to be Bain, Silver Lake Partners and TPG (formerly Texas Pacific Group).
In September 2007, COMS announced plans to sell itself to private equity company Bain Capital Partners, LLC (co-founded by Mitt Romney) for $2.2 billion in cash, pending necessary approvals. The deal, at $5.30 a share, is at a premium to COMS’ recent trading range, but values the company at a discount to peers because it has been mismanaged and not been profitable in many years.
The reason for Huawei being in the deal is so they would not be competing with now-privately owned 3Com after expiration of non-compete agreement next year - that was Bain’s insistence and requirement to making a deal, in fact it was a deal-breaker. Huawei will have a minority stake in new, private 3Com.
3Com does not possess any technology that is unavailable otherwise in US, or be valuable to Chinese military, that they (or Huawei) don’t already have. This is purely a typical private equity business deal where PE firm (Bain Capital) expects to affect a turnaround and make money.
What is missing here is whether 3com has any defense contracts or defense technology. I have not see stories indicating that they do. Hopefully if there is it will turn up in the security review.
There are some companies - like Mamco technology that have been prohibited to Chinese investors that I also was not aware had any important technology.