3Com’s China deal blocked on security grounds
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Buy-out of telecommunications equipment manufacturer by
The proposed buy-out of telecommunications equipment manufacturer 3Com by Chinese counterpart Huawei Technologies and private-equity firm Bain Capital Partners has been derailed. A US committee that governs foreign investment denied its approval because the company makes equipment for US defence forces.
Aware of the security concerns, Bain – the private-equity firm co-founded by ex-Presidential candidate Mitt Romney – had taken measures to ensure that control of the company remained in American hands, but that was not enough to allay the fears of the Committee on Foreign Investment in the United States (CFIUS).
Bain Capital Partners and Huwaei have consequently withdrawn their application to acquire the company, whose customers include West Midlands Police and the
"We are very disappointed," said Edgar Masri, president and CEO of 3Com. "We [will] work closely with Bain Capital Partners and Huawei to construct alternatives that would address the CFIUS's concerns.”
See March’s issue of Information Age for a feature on the security threat from
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