Feeds

Latest China scare torpedos 3Com takeover

I trump your China card with my national security fears

Remote control for virtualized desktops

3Com's proposed takeover by a US private equity firm and a Chinese rival lay in tatters today, with the three companies admitting defeat in their attempts to mollify US government national security concerns.

3Com stock plunged 20 per cent today on news that the company, along with wannabe owners Bain Capital and networking equipment maker Huawei Technologies, today withdrew their application to the Committee on Foreign Investments in the United States (CFIUS). This division of the US Treasury can block deals if "it believes the nation's security would be placed at risk", CNNMoney reports. So, no application means no deal.

The proposed takeover was an immediate cause for concern with US feds when Bain offered to buy 3Com for $2.2bn cash in September 2007. Under the original terms, Huawei would secure a 16.5 per cent stake in 3Com, while Bain took the rest.

Officials are uneasy about a Chinese manufacturer being granted access to 3Com's TippingPoint unit, which sells intrusion prevention technology to the US government. Critics of the deal also point out that Huawei's founder, Ren Zhengfei, is a former Chinese army officer.

Earlier this month, Xu Zhijun, chief marketing officer at Huawai, told the Financial Times that concerns over the deal are "bullshit."

Since then, Huawei has put back on its corporate game face.

“We are very disappointed that we were unable to reach a mitigation agreement with CFIUS for this transaction,” said Edgar Masri, CEO of 3Com in a statement.

The 3Com takeover appeared to be back on track last week with an supposed offer to spin-off TippingPoint instead. But the negotiations have clearly not satisfied US feds.

Huawei and Bain said they are committed to continuing discussions, but it is difficult to see a way forward with this deal. ®

Remote control for virtualized desktops

More from The Register

next story
Azure TITSUP caused by INFINITE LOOP
Fat fingered geo-block kept Aussies in the dark
NASA launches new climate model at SC14
75 days of supercomputing later ...
Yahoo! blames! MONSTER! email! OUTAGE! on! CUT! CABLE! bungle!
Weekend woe for BT as telco struggles to restore service
You think the CLOUD's insecure? It's BETTER than UK.GOV's DATA CENTRES
We don't even know where some of them ARE – Maude
DEATH by COMMENTS: WordPress XSS vuln is BIGGEST for YEARS
Trio of XSS turns attackers into admins
Cloud unicorns are extinct so DiData cloud mess was YOUR fault
Applications need to be built to handle TITSUP incidents
BOFH: WHERE did this 'fax-enabled' printer UPGRADE come from?
Don't worry about that cable, it's part of the config
Astro-boffins start opening universe simulation data
Got a supercomputer? Want to simulate a universe? Here you go
prev story

Whitepapers

Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
10 threats to successful enterprise endpoint backup
10 threats to a successful backup including issues with BYOD, slow backups and ineffective security.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
The Heartbleed Bug: how to protect your business with Symantec
What happens when the next Heartbleed (or worse) comes along, and what can you do to weather another chapter in an all-too-familiar string of debilitating attacks?