HP fronts $2.7bn in 3Com takeover

Huge acquisition hot on the heels of the Cisco deals
Publish date:
3_Figure Arena Inside.jpg

Hewlett-Packard is paying $2.7 billion to acquire internet network and security firm 3Com.

The move indicates HP’s intent to broaden its business beyond hardware and become a one-stop shop for customers.

The move is also a telling indicator of the market confidence that’s pouring back into the tech sector. The HP deal comes fast after a rapid succession of major takeover deals in the business.

Logitech announced yesterday it was to buy video-telecoms firm LifeSize for $405 million. Two weeks prior, networking giant Cisco made an extraordinary double-salvo buyout of both wireless networking firm Starent and Norwegian videoconferencing group Tandberg. Both Cisco’s buyouts will cost it as much as $6 billion.

Hewlett-Packard’s 3Com takeover – at $2.7 billion – still stands out as one of the biggest moves in the sector.

The firm says the acquisition "will transform the networking industry and underscore HP's next-generation data centre strategy built on the convergence of servers, storage, networking, management, facilities and services".

Much of 3Com’s strength is its popularity in the ever-expanding China and Asian territory.

"Companies are looking for ways to break free from the business limitations imposed by a networking paradigm that has been dominated by a single vendor," said Dave Donatelli, executive vice president and general manager of HP's enterprise servers and networking group.

The acquisition bid was made at a 53 per cent premium to 3Com’s share price. The deal needs regulatory approval.