EU approves HP's 3Com acquisition

The European regulators have concluded the deal will not harm competition

The European Commission has approved Hewlett-Packard's US$2.7 billion takeover of 3Com without attaching conditions, the Commission announced on Friday.

HP and 3Com both manufacture network hardware. However, there is little overlap in any specific European markets. 3Com's appeal to the IT giant is understood to lie chiefly in its strength in the Chinese market, where it generates more than half of its $1.3 billion annual sales.

"The Commission's investigation confirmed that the merged company would continue to face a number of global and effective competitors giving customers the choice from a range of alternative providers for switches and routers," the Commission said in a statement.

HP has said it expects to close the acquisition by the end of June. The deal was first announced in November.

China's competition regulator, the Ministry of Commerce, or Mofcom, has yet to rule on the takeover. Although the deal poses little threat to competition in China, some expect Mofcom to drag its feet in approving the deal, because in 2008 the U.S. blocked a bid by China's Huawei Technologies for 3Com.

The Huawei deal was blocked because the U.S. didn't want certain 3Com security software falling into the hands of the Chinese.

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Paul Meller

IDG News Service
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