Huawei keeps its acquisition options open

Huawei may have found itself once again having to squash rumors that it is acquiring financially ailing Alcatel-Lucent (NYSE: ALU), but that doesn't mean it's not ruling out acquisitions altogether.  

Ken Hu, Huawei's CMO, did reveal during the Reuters Global Technology Summit that the company will take will take "cross cultural" integration into consideration when making any acquisition decisions. At the same time, Hu said any reports of the Chinese vendor purchasing Alcatel-Lucent were simply "rumor." Late last summer, reports surfaced that Huawei would acquire Alcatel-Lucent.

"When we think about making an acquisition we need to think about our capability to consolidate the new business and whether we will be able to manage it well, especially for the cross cultural element," Hu said.

What's fueling rumors that Huawei could emerge as a consolidator of the struggling telecom equipment market is that Huawei not only saw its profits double in 2009, but that it predicted strong sales in wireless and broadband would drive up revenue by 20 percent. Meanwhile, Alcatel-Lucent has struggled to make a profit, making it a prime takeover target.

But for all the success that the vendor has had in garnering a number of wireless deals outside its China home base with the likes of Telenor and Telia Sonera, the toughest acquisition challenge Huawei faces is the North American telecom market. One issue that's plagued Huawei in the United States is its possible ties to the People's Liberation Army (PLA) make it a national security risk.

For more:
- Reuters has this article

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