Feeds

Latest China scare torpedos 3Com takeover

I trump your China card with my national security fears

SANS - Survey on application security programs

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. ®

3 Big data security analytics techniques

More from The Register

next story
This time it's 'Personal': new Office 365 sub covers just two devices
Redmond also brings Office into Google's back yard
Kingston DataTraveler MicroDuo: Turn your phone into a 72GB beast
USB-usiness in the front, micro-USB party in the back
IBM rides nightmarish hardware landscape on OpenPOWER Consortium raft
Google mulls 'third-generation of warehouse-scale computing' on Big Blue's open chips
It's GOOD to get RAIN on your upgrade parade: Crucial M550 1TB SSD
Performance tweaks and power savings – what's not to like?
AMD's 'Seattle' 64-bit ARM server chips now sampling, set to launch in late 2014
But they won't appear in SeaMicro Fabric Compute Systems anytime soon
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mainstay ROI - Does application security pay?
In this whitepaper learn how you and your enterprise might benefit from better software security.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.