3Com takes majority in venture with Huawei

3Com takes majority in venture with Huawei

3Com has taken a majority stake in its Huawei-3Com Ltd. joint venture.

3Com now owns a majority of the joint venture it formed with China's Huawei Technologies in 2003 to develop and build enterprise switches and routers.

The partners agreed last October that 3Com would pay Huawei US$28 million for 2 percent of the shares of Huawei-3Com, giving 3Com a 51 percent stake and Huawei 49 percent. The deal closed Jan. 27 after approval from the Chinese government, 3Com said.

Huawei-3Com is based in Hong Kong but has its primary operations in Hangzhou, China. 3Com, based in Massachusetts, teamed up with Huawei in November 2003 in order to reach the China market and develop enterprise gear more quickly, the company said. The joint venture sells products worldwide and had revenue of $US111 million in the third quarter of 2005, according to 3Com.

Scott Murray, chief executive officer of 3Com, will become chairman of Huawei-3Com. The U.S. company will appoint five directors to the venture's board and Huawei will appoint four.

Huawei is China's largest telecommunications equipment provider. In 2004 it had $US5.6 billion in revenue, and last year it had 24,000 employees. 3Com sells data and voice network equipment for enterprises and small- and medium-sized businesses.

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