US computer giant Hewlett-Packard today announced that it has agreed to buy networking company 3Com for $2.7 billion, a move it hopes will help it further expand in the growing Chinese market.
The world's largest computer maker said the 3Com pdeal would advance a strategy to offer businesses data centre packages that combine servers, storage, networking, management and services.
The takeover offer has been approved by HP and 3Com boards of directors. Under its terms, 3Com stockholders will get $7.90 per share of common stock.
The acquisition is expected to close in the first half of next year providing it gets approval from regulators and stockholders.
3Com has grown into a $1.3 billion global corporation specialising in enterprise computer networking since it was founded in the US state of Massachusetts in 1979. 3Com brands include H3C in China and the TippingPoint computer security business.
HP said it expects the 3Com acquisition to significantly strengthen its position in the fast-growing China market.
3Com has nearly a third of the computer-switching market in China and its products are used by 70% of the Chinese government's networks as well as in 300 of the top 500 enterprise companies in the nation, HP said. 3Com also has a major research facility in China.
A 3Com acquisition would make HP more of a threat to networking powerhouse Cisco, which has been moving into the computer titan's turf. It would also help HP expand beyond a computer market beaten down by the financial crisis.
Hewlett Parkard yesterday also released preliminary financial results from its fourth fiscal quarter, reporting earnings of 99 cents per share on revenues of $30.8 billion. Revenues for the quarter were down 8% from the same time a year earlier while earnings bested the 84 cents per share seen in the fourth fiscal quarter last year.
'Solid execution drove exceptional performance for HP this quarter, fueled by significant growth in China,' said HP's CEO Mark Hurd. 'We are delivering on our strategy and are well positioned going into 2010,' he added.
