Bain Drops Request for US Approval of 3Com Deal

3Com has announced that the company along with affiliates of Bain Capital Partners and China's Huawei have withdrawn their joint filing to the Committee on Foreign Investment in the United States (CFIUS) concerning the parties' proposed merger transaction. The parties remain committed to continuing discussions.

The CFIUS panel had raised questions about 3Com's subsidiary TippingPoint, which sells security software used by U.S. government agencies. The panel was concerned about the minority holding by China's Huawei in the company. Despite protests by Huawei that its minority interest would not enable it to control the company or "steal" national security implicated secrets, there have been political concerns about the purchase.

"We are very disappointed that we were unable to reach a mitigation agreement with CFIUS for this transaction," said Edgar Masri, President and CEO of 3Com Corporation. "While we work closely with Bain Capital Partners and Huawei to construct alternatives that would address CFIUS' concerns, we will continue to execute our strategy to build a global networking leader. We remain focused on serving our growing base of worldwide customers and providing them with innovative solutions that deliver long-term investment for their network infrastructure and offer them a lower total cost of ownership."

On September 28, 2007, 3Com's Board of Directors unanimously approved a definitive merger agreement under which the company would be acquired by affiliates of Bain Capital Partners for approximately $2.2 billion in cash. The parties voluntarily submitted the proposed transaction, which included a minority ownership stake by Huawei Technologies, to CFIUS review.

Posted to the site on 20th February 2008