3Com Buys Huawei’s Stake in H-3C

As reported by the Associated Press, 3Com Corporation has announced that it has purchased Huawei Technologies’ 49-percent stake in their joint venture, Huawei-3Com (H-3C), for $882 million. Prior to buying out Huawei’s stake, 3Com owned 51 percent of the joint venture.

Private-equity firms were aggressively trying to secure majority control of H-3C, but for now 3Com has claimed the prize, which reputedly carries an implied equity value of $1.8 billion.

Now we’ll have to see what this means. If Huawei abandons H-3C, it will lose valuable sales channels and operational capabilities that have enabled it to gain significant traction in China and beyond. It is not clear how or whether 3Com would be able to find substitutes for the benefits and value Huawei has provided.

I’ll report back after I learn more about the details behind this deal.

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