According to the Wall Street Journal reported that informed sources, HP is looking for a buyer for its enterprise network business in China, the move or will make Hangzhou H3C Corporation controlled by Chinese companies again.
Allegedly, HP has begun to test the Chinese private equity firm intention might be interested in this business; it’s action is still in its early stages, as occur buyers, HP expects to sell at least H3C 51% stake. Informed sources pointed out that the total value of H3C may reach around 5 billion dollars.
After the American government use American companies’ infrastructures to collect home and abroad data news broken, Hewlett-Packard and other US technology companies in China are facing a lot of pressure. Informed sources said on H3C transaction to be approved by the Chinese government, the buyer is likely to require a local Chinese companies.
Traditional enterprise network equipment providers are also faced with low-cost equipment or services provided through the clouds the impact of competitors. Earlier this year, IBM agreed to pay $ 2.3 billion of which will be sold to Lenovo x86 server business.
In China, H3C is a major provider of enterprise data networking equipment, mainly engaged in routers, software, switches and other products, currently total of 5,000 employees worldwide. HP is not listed H3C’s performance data separately in the earnings, and therefore the latter’s annual revenue is unknown. HP spend $ 2.7 billion acquisition of 3Com Corporation and took over the H3Cin 2010.
Informed sources said, H3C buyer might be another Chinese technology companies, but it is more likely to be sold to private equity firms.
HP itself is restructuring now. This month the company announced it would split into two plans, after spin-off, a company focused on corporate buyers of hardware and services, another major sale of the PC and the printer. The size of these two businesses with annual revenues are more than 50 billion US dollars. HP said it might strengthen their business through mergers and acquisitions, and the sale of H3C can bring to it the funds to promote the program.
Before announced spin-off, HP has been in merger talks with the data storage giant EMC for several months, both combined market capitalization of over 120 billion US dollars. According to reports, those talks have ended.
Informed sources said that no matter with whom for the transaction, HP will retain a minority stake in H3C, this company also want to continue to use H3C’s low-cost manufacturing capabilities.