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Huawei-3Com JV attracts private-equity bids

Posted: 02 Nov 2006 ?? ?Print Version ?Bookmark and Share

Keywords:H-3C? Huawei Technologies? 3Com? private equity firm? acquisition?

The potential sale of H-3C, the Chinese joint venture between Huawei Technologies and 3Com Corp., is attracting bids from private equity firms that range from $1.5 billion to $2 billion, according to a report from Wall Street Journal.

That's up from the $1 billion to $1.5 billion that was on offer just last month, even though one of the private equity firmsTexas Pacific Grouphas reportedly dropped out of the bidding process. Those that remain are Silver Lake Partners and Bain Capital.

3Com owns 51 percent of the JV, with Huawei owning the rest. The Hangzhou, China-based venture was set up in 2003 to design networking gear, which mostly sells into China and Japan.

It is still unclear whether a deal will go through. Rumors have circulated that 3Com and Huawei each want to buy out the other's stake, but the partners have different goals for the venture. Huawei may sell it to private equity, while 3Com has indicated it wants to keep the venture in-house as a cornerstone of its strategy to battle Cisco Systems.

Buyouts of publicly traded semiconductor companies have been a hot topic in the wake of Philips' tapping private equity to spin out its semiconductor unit into NXP and Freescale's acquisition for $17.6 billion by a consortium led by The Blackstone Group and includes The Carlyle Group, Permira Funds and Texas Pacific Group.

- Mike Clendenin
EE Times




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