3Com has withdrawn the $2.2 billion acquisition offer it received from Bain Capital and China's Huawei Technologies from regulatory consideration by the federal Committee on Foreign Investment in the United States. After the deal was announced last September, it immediately drew questions about the role Huawei would play and how much of 3Com it would ultimately have the option to own. Soon after, national security concerns began to boil over Huawei's possible connections to the Chinese government and the sensitivity of data held by 3Com's Tipping Point software unit. What's next for 3Com? It had been rumored to be on the block for a while before the Bain/Huawei offer was announced, and perhaps larger vendors with enterprise interests could again be considered potential buyers.
Meanwhile, The New York Times story we're linking to talks about private equity buyouts being on the skids. There have been many private equity acquisitions in telecom the last year or so, with a couple announced already this year. General economic imbalance hasn't previously been perceived to be a threat to these deals, so it will be interesting to see if the action keeps up or begins to wane.
- read this story at The New York Times
- It was reported last fall that Huawei could boost its 3Com stake to 21.5%