Wednesday, March 28, 2007

3Com Buys Out Huawei's Stake in Joint Venture

3Com Corporation closed its acquisition of Huawei Technologies' 49% stake in H3C for $882 million and 3Com now owns 100% of the China-based company. To fund the transaction and related fees and expenses, 3Com used approximately $470 million of cash from its balance sheet and approximately $430 million from a senior secured bank loan at its H3C segment.

3Com won the right to acquire the remaining stake in H3C through a bidding process that ended on November 28, 2006 and received the final required approval from the People's Republic of China on March 22, 2007. Additionally, members of H3C's management team have signed two-year employment contracts that go into effect with today's closing. Included in the agreement are bonuses tied to aggressive targets based on H3C's future financial performance, as well as non-compete provisions.