3Com to Host Conference Call Today at 6:00 p.m. EST to Discuss Details of the Transaction
MARLBOROUGH, Mass., Nov 28, 2006 (BUSINESS WIRE) -- 3Com Corporation (NASDAQ: COMS) today announced that it has agreed
to buy Huawei Technologies' 49 percent stake in Huawei-3Com (H3C) for
$882 million, which represents an implied equity value of $1.8
billion. The transaction is subject to customary approval in the
People's Republic of China.
The agreement, which, upon closing, gives 3Com full ownership of
H3C, was reached through a bid process established under the parties'
existing shareholders' agreement that enabled either party to make
cash bids to buy the other party's shares in H3C. 3Com initiated the
process with a bid on November 15, 2006; 3Com's last bid was accepted
by Huawei on November 27, 2006.
"Thanks to the tireless leadership of H3C's Chief Operating
Officer, Dr. Zheng Shusheng, and his management team, H3C has proven
to be a well-established, stand-alone business with substantial market
share in China and strong potential to expand globally, and we are
very excited at the prospect of owning 100 percent of the venture,"
said Edgar Masri, President and CEO of 3Com. "H3C is a strategic asset
and we believe that 3Com is well positioned to help it expand its
global presence. We believe 3Com, with H3C, can build a powerful,
global technology leader.
"Additionally, I want to personally thank Mr. Ren Zhengfei, CEO of
Huawei, for his efforts and support, as well as recognize Huawei's
contributions to our successful partnership. We look forward to
continuing our relationship with Huawei as a key customer of H3C."
Under the existing shareholders' agreement, the parties have
agreed that the selling shareholder in the bid process would, under
certain circumstances, be subject to a non-compete provision for 18
months after the closing.
3Com will communicate the details of its financing plans for the
acquisition at a future date.
Management will host a conference call and webcast at 6 p.m. EST
today to discuss details about this transaction. To participate on the
call, U.S. and international parties may dial (719) 457-2633.
Alternatively, interested parties may listen to the live broadcast of
the call over the Internet at 3Com's Investor Relations Web site
(www.3com.com/IR) in the Earnings webcast section.
This press release contains forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, including forward-looking statements
regarding our agreement to purchase a 49% equity interest in our H3C
joint venture, our intent to continue our relationship with Huawei,
our goals for H3C and its growth opportunities, our goal to become a
global powerhouse and our financing plans. These statements are
neither promises nor guarantees, but involve risks and uncertainties
that could cause actual results to differ materially from those set
forth in the forward-looking statements, including, without
limitation, risks relating to: our ability to incentivize and retain
H3C management and other critical H3C employees; our ability to
maintain commercial relationships with Huawei; the possibility that
Huawei could reduce its business with and operational assistance to
H3C and we may face increased competition from Huawei in certain areas
of our business; our ability to obtain Chinese government approval of
any such transaction; our ability to raise equity or debt capital in
order to finance this transaction; our ability to obtain such
financing on terms acceptable to us; and other risks detailed in the
our filings with the SEC, including those discussed in our quarterly
report filed with the SEC on Form 10-Q for the quarter ended September
1, 2006. 3Com Corporation does not intend, and disclaims any
obligation, to update any forward-looking information contained in
this press release or with respect to the announcements described
About 3Com Corporation
3Com Corporation is a leading provider of secure, converged voice
and data networking solutions for enterprises of all sizes. 3Com
offers a broad line of innovative products backed by world class
sales, service and support, which excel at delivering business value
for its customers. Through its TippingPoint division, 3Com is the
leading provider of network-based intrusion prevention systems that
deliver in-depth application protection, infrastructure protection,
and performance protection. 3Com also is the majority owner of
Huawei-3Com Co., Ltd. (H3C), a China-based joint venture formed by
3Com and Huawei in November 2003. H3C brings innovative and
cost-effective product development and manufacturing and a strong
footprint in one of the world's most dynamic markets. For further
information, please visit www.3com.com, or the press site
Copyright (C) 2006 3Com Corporation. 3Com and the 3Com logo are
registered trademarks and TippingPoint is a trademark of 3Com
Corporation. All other company and product names may be trademarks of
their respective holders.
SOURCE: 3Com Corporation
Media & Investor Relations
John Vincenzo, 508-323-1260