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Sale of 3Com on hold

by on25 February 2008


National security concerns

We reported earlier that Bain Capital Partners LLC, of which former U.S. Presidential hopeful Mitt Romney was a majority partner, and Huawei Technologies Company, a Chinese-based company, were planning to purchase former U.S. technology giant 3Com. 

The $2.2 billion deal had to be reviewed by the U.S. government’s Committee on Foreign Investment in the United States due to Congressional concerns over the sale of U.S. technology to a company in China, where the principal owner reportedly has former ties to the Chinese military.  The CFIUS has raised national security concerns due to potential military application use and satellite technology that are reportedly part of the 3Com sale.

While a Hong Kong-based branch of Bain Capital would have a large stake in 3Com, the lack of U.S. onshore control over the technology has the Congressional Committee in an uproar. The majority owner of Huawei is said to have been a former high ranking officer in the Chinese Red Army with considerable ties to the Chinese military, and the U.S. government is seeking more information and assurances given this fact.

Last modified on 25 February 2008
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