In a blockbuster deal, Hewlett Packard on Wednesday announced it has entered into a definitive agreement to purchase 3Com at a price of $7.90 per share. That breaks down to about $2.7 billion and puts HP, which is already a strong networking company, in a better position to compete with Cisco.
"“Companies are looking for ways to break free from the business limitations imposed by a networking paradigm that has been dominated by a single vendor," said Dave Donatelli, executive vice president and general manager, Enterprise Servers and Networking, HP. "By acquiring 3Com, we are accelerating the execution of our Converged Infrastructure strategy and bringing disruptive change to the networking industry. By combining HP ProCurve offerings with 3Com’s extensive set of solutions, we will enable customers to build a next-generation network infrastructure that supports customer needs from the edge of the network to the heart of the data center."
The acquisition will help HP build its networking portfolio, particularly in expanding the company's Ethernet switching offerings and routing solutions, HP said the move will also help strengthen its position in the fast growing Chinese market.
Terms of the transaction have already been approved by the HP and 3Com board of directors and is expected to close in the first half of 2010.