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HP-Cisco battle spreads to China with 3Com deal

Owen Fletcher | Nov. 13, 2009
HP's acquisition of the networking gear vendor will unlock a major new market

When asked about potential regulatory obstacles for the deal in China, the HP spokesman said the company expects no opposition as it seeks approval from U.S. and foreign authorities. Gray areas in Chinese rules on foreign investment could potentially be used against HP, but it is too early to predict obstacles, said Singh of Gartner.

National security concerns in the U.S. last year derailed an attempted acquisition of 3Com by Bain Capital Partners, which would have given Huawei a stake in the company.

As HP expands its Chinese customer base through its new partner, 3Com will also seek to grow through HP in the U.S. The merger will speed 3Com's plan to sell more products outside of China after proving them inside the country first, a 3Com representative said in an e-mail. HP's customer base and investment ability will benefit 3Com's products, the representative said.

3Com has only made on-and-off attempts to rebuild market share in North America in recent years, and it remains to be seen how much the HP deal will help, said Jura of Ovum.

"It's going to very much depend on how well HP can actually integrate 3Com's operations," he said.


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