Huawei



Technology January 28, 2008, 7:28AM EST
http://www.businessweek.com/globalbiz/content/jan2008/gb20080128_455779.htm?chan=search

3Com Schedules Vote on Huawei Deal
The U.S. network equipment maker's shareholders will vote Feb. 29 on a
proposed buyout by Bain and China's Huawei Technologies

The board of 3Com scheduled a shareholder vote on a $2.2 billion
buyout by a consortium that includes a Chinese company, signaling
confidence the deal can clear antitrust and national security reviews.

In a filing with the US Securities and Exchange Commission, the
network equipment maker said shareholders are set to meet at 8 a.m. on
February 29 to vote on a proposed buyout by private equity firm Bain
Capital Partners and China's Huawei Technologies.

Some attorneys familiar with the national security review said the
deal continues to face significant resistance at some federal agencies
because of Huawei's role.

Boston-based Bain Capital has said it is working to close the deal
before the first quarter ends March 31 even though it has yet to get
the government's OK. The concern is whether sensitive military
technology could be transferred to China via the minority stake held
by Huawei, a Chinese telecommunications company.

In late September, Bain requested a national security review with the
Committee on Foreign Investment in the US, a 12-agency group with the
authority to recommend the White House block or alter terms of deals
that involve national security.

Shenzen-based Huawei would hold 16.5% of the new company's stock and
have the power to appoint three of the 11 board members. Bain Capital,
which was co-founded by former partner Mitt Romney, a Republican
presidential candidate Mitt Romney as a partner, would own 83.5% of
the shares and appoint the other eight members. Huawei would not hold
management roles, a 3Com filing to the SEC said.

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