Bangkok--9 Apr--TQPR
3Com Corporation (NASDAQ: COMS) reported that its acquisition of Huawei Technologies' 49 percent stake in Huawei-3Com Co., Limited for US$882 million officially closed and 3Com now owns 100 percent of the China-based company. To fund the transaction and related fees and expenses, 3Com used approximately US $470 million of cash from its balance sheet and approximately US $430 million from a senior secured bank loan at its Huawei-3Com Co., Limited segment.
"With 100 percent ownership of Huawei-3Com Co., Limited, 3Com significantly improves its long term growth profile and expands its global technology leadership position," said Edgar Masri, 3Com President and Chief Executive Officer. "With the transaction behind us, we can now focus our complete attention on integrating our sales and marketing efforts in Asia Pacific, capitalizing on Huawei-3Com Co., Limited's growth in China, and continuing to make progress in improving the financial performance of the combined company."
3Com won the right to acquire the remaining stake in Huawei-3Com Co., Limited through a bidding process that ended on November 28, 2006 and received the final required approval from the People's Republic of China on March 22, 2007. Additionally, members of Huawei-3Com Co., Limited's management team have signed two-year employment contracts that go into effect with the closing. Included in the agreement are bonuses tied to aggressive targets based on Huawei-3Com Co., Limited's future financial performance, as well as non-compete provisions.