HP Buys 3Com for $2.7 Billion

    November 12, 2009
    Chris Crum

HP announced today that it is acquiring 3Com, makers of network switching, routing, and security solutions, for $2.7 billion in cash (at 7.90 per share). Both boards have already approved the transaction.

HP says the combination of these two companies will transform the networking industry and "underscore HP’s next-generation data center strategy." The company believes this will help customers simplify networks and improve IT service delivery capabilities.

Dave Donatelli"Companies are looking for ways to break free from the business limitations imposed by a networking paradigm that has been dominated by a single vendor," said Dave Donatelli, executive vice president and general manager, Enterprise Servers and Networking, HP. "By acquiring 3Com, we are accelerating the execution of our Converged Infrastructure strategy and bringing disruptive change to the networking industry. By combining HP ProCurve offerings with 3Com’s extensive set of solutions, we will enable customers to build a next-generation network infrastructure that supports customer needs from the edge of the network to the heart of the data center."

HP’s Ethernet switching offerings will see a significant expansion as a result from the acquisition. It will also add routing solutions, and greatly strengthen  HP’s position in China. They will also be adding a large research and development team in that country.

"Our extensive product line and innovative technology together with HP’s breadth and scale will expand our global opportunity," said 3Com CEO Bob Mao. "3Com’s networking products are based on a modern architecture which has been designed to offer better performance, require less power and eliminate administrative complexity when compared against current network offerings. Our products are enterprise proven and widely deployed in the world’s largest banks, manufacturers, Internet service providers, public utilities and retailers."

HP will be getting 3Com’s security solutions, which include its TippingPoint line, which is apparently used among 30% of Fortune 1000 companies.

The deal is still subject to domestic and foreign regulatory approval, as well as approval from 3Com’s stockholders. The transaction is expected to close in the first half of next year.

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