Huawei teams up with Bain Capital to acquire 3com

Chinese telecom equipment maker Huawei and US private equity group Bain Capital have reached an agreement to jointly acquire US telecoms device maker 3Com for US$2.2 billion, Economic Observer reported (in Chinese). Huawei will have a minority stake of 16.5% in the company, which is currently loss-making, and become a commercial and strategic partner. Jonathan Zhu, one of Bain's managing directors, said the transaction will be accomplished in the first quarter of 2008, after which it will start to restructure 3Com to make it profitable. The takeover bid has been approved by 3Com's board, but awaits approval by the US government, as some of 3Com's products contain what may be considered sensitive technologies related to national security, according to the Financial Times.