I’ve gotten some questions about what stands in the way of HP’s pending 3Com acquisition.
We might hear more on the matter from HP when it reports its quarterly financial results tomorrow, but my understanding is that the primary obstacle to the formal consummation of the deal is the second-phase of a review undertaken by China’s Ministry of Commerce (MOFCOM).
Quoting from a Form 8-K submitted by 3Com to the US Securities and Exchange Commission (SEC):
Under the Anti-Monopoly Law of the People’s Republic of China, the parties are required to submit a filing to the Ministry of Commerce (“MOFCOM”). The parties made a joint filing on December 4, 2009. MOFCOM formally accepted the filing on December 28, 2009, commencing the 30-day Phase I review process. On January 25, 2010, MOFCOM notified the parties it would not complete its review by January 27, 2010, the end of the Phase I review period, and that a Phase II review would be initiated. The initial Phase II review period is up to 90 days and can be extended by MOFCOM by up to an additional 60 days.
The parties continue to target completion of the merger by the end of April 2010, however the exact timing cannot be predicted. The closing of the merger is subject to the satisfaction or waiver of specified closing conditions, including, without limitation, the expiration or termination of waiting periods, and obtaining of requisite approvals or clearances, under specified antitrust and competition laws (including, without limitation, in China and the European Union, among others).
The acquisition was approved by the European Union, so the Chinese regulatory review stands as the last barrier to the deal’s completion.