[photopress:it_3Com_Masri.jpg,full,alignright]The Wall Street Journal reports that Bain Capital and China’s Huawei plan to resubmit an application seeking U.S. approval for their planned $2.2 billion buyout of 3Com within the next several weeks.
Best information is that the new transaction under consideration still would leave Huawei with 16.5% of the company and Bain holding the rest. But the deal would be structured to limit Huawei’s access to some core U.S.-related network products, including certain Ethernet technologies, which are essential for the communications between computers. The purchase price is expected to remain the same.
This follows from the agreement in September last year by 3Com’s Board of Director of a definitive merger agreement under which the company would be acquired by affiliates of Bain Capital Partners for approximately $2.2 billion dollars in cash.
Last week, the parties pulled their application with the Committee on Foreign Investment in the United States, or CFIUS, a12-agency government panel amid concerns it would be rejected due to the pressure from Congress and from the media. The view appeared to be that 3Com’s technology was such that it could not be put under the control of another power.
Presumably this new deal is expected to get around this objection. Which must have intenesely disappointed 3Com President and CEO Edgar Masri who is seen in our illustration.
Source: China View