U.S. committee remains wary of 3Com takeover deal

Summary:3Com's takeover by Bain Capital and Huawei Technologies continues to get close scrutiny by the U.S.

3Com's takeover by Bain Capital and Huawei Technologies continues to get close scrutiny by the U.S.

According to the Financial Times, the Committee on

Foreign Investment in the U.S. is expected to extend a probe of the 3Com deal with Bain and Huawei. Under the deal, Bain and Huawei are trying to buy 83.5 percent of 3Com with Huawei taking the rest for about $2 billion.

The news isn't surprising given previous worries about Huawei's involvement with 3Com. At issue is 3Com's ownership of TippingPoint, a security firm. 3Com also supplies intrusion prevention technology to the Defense Department. The Financial Times reports that the next six weeks will be critical for the deal and "feature some tough talks."

The foreign investment committee, which also shot down Check Point's acquisition of Sourcefire, could recommend that Bain/Huawei divest TippingPoint. The U.S.-China Economic Security Review Commission has flagged concerns about China's impact on U.S. technology and security.

So how will this play out? At worst, TippingPoint is divested. But overall it's hard to envision the 3Com deal being blocked. After all, no one is complaining about the Chinese government is buying chunks of financial giants in the U.S.

Topics: Security, Government, Government : US

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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