A United States House committee is investigating the proposed
US$2.2 billion acquisition of 3Com Corp by Bain Capital LLC and
China's Huawei Technologies Co, a deal that has sparked
national-security concerns in Washington.
The Energy and Commerce Committee requested information from the
US Treasury Department on its investigation of the proposed
transaction, Committee Chairman John Dingell, a Democrat from
Michigan, said.
Putting 3Com's networking technology in Chinese hands may
threaten national security because the Pentagon uses firewalls made
by 3Com, committee members told Treasury Secretary Hank Paulson,
according to Bloomberg News. Under the terms of the deal, Huawei,
founded by former army officer Ren Zhengfei 20 years ago, will get
a 16.5-percent stake in 3Com.
"There is growing apprehension in the Congress about the
proposed acquisition," politicians wrote.
3Com, based in Marlborough, Massachusetts, fell eight cents, or
1.9 percent, to US$4.05 on Friday on the Nasdaq Stock Market. Bain
and Huawei offered US$5.30 a share for 3Com in September.
Bain said it was working to assure law makers that the
transaction is safe. The Boston-based investment company would own
83.5 percent of 3Com if the deal is approved.
(Shanghai Daily February 4, 2008)
