Feeds

Huawei drops 3Leaf buy

Capitol Hill says no

Boost IT visibility and business value

Chinese telecoms equipment manufacturer Huawei has withdrawn from its controversial takeover deal for US server firm 3Leaf Systems following objections from US politicians and regulators.

The modest $2m (£3.1m) deal was agreed in May 2010 but not immediately disclosed at the time. Overseas ownership concerns prompted an investigation of the deal by the Committee of Foreign Investment in the United States, which raised objections that prevented the deal from completing.

Rather than fight the decision, Huawei has decided to abandon its interest in 3Leaf.

The allegedly close ties between Huawei and the Chinese People Liberation Army (PLA) have created problems for previous commercial deals by the telecom and network equipment firm. Most notably the $2.2bn 2007 deal by Bain Capital to buy 3Com with minority financing from Huawei Technologies fell through because of regulatory opposition.

Most of this opposition stemmed from concerns about letting a Chinese firm gain access to the TippingPoint IPS system used to protect government departments that formed part of 3Com's portfolio. 3Com was eventually sold to HP for $2.7bn in 2009.

Politicians and intelligence agencies in Australia, India and the UK have all expressed concerns about giving the go-ahead for local carriers to use Huawei's kit. The opposition Conservatives lobbied against a proposed deal by Huawei to buy Marconi back in 2005, for example.

Former Home Secretary David Blunkett voiced concerns about the security implications of BT sourcing a sizeable proportion of its kit from Huawei back in 2009. Despite this, BT remains a major customer.

Huawei is in the running to sell equipment that would extend mobile networks to the London underground in time for next year's Olympic Games, the BBC reports. ®

The essential guide to IT transformation

More from The Register

next story
The Return of BSOD: Does ANYONE trust Microsoft patches?
Sysadmins, you're either fighting fires or seen as incompetents now
Microsoft: Azure isn't ready for biz-critical apps … yet
Microsoft will move its own IT to the cloud to avoid $200m server bill
Oracle reveals 32-core, 10 BEEELLION-transistor SPARC M7
New chip scales to 1024 cores, 8192 threads 64 TB RAM, at speeds over 3.6GHz
Docker kicks KVM's butt in IBM tests
Big Blue finds containers are speedy, but may not have much room to improve
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
Gartner's Special Report: Should you believe the hype?
Enough hot air to carry a balloon to the Moon
Flash could be CHEAPER than SAS DISK? Come off it, NetApp
Stats analysis reckons we'll hit that point in just three years
Dell The Man shrieks: 'We've got a Bitcoin order, we've got a Bitcoin order'
$50k of PowerEdge servers? That'll be 85 coins in digi-dosh
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.