HP to acquire 3Com for $2.7 billion

NOVEMBER 12, 2009 -- HP and 3Com Corp. have entered into a definitive agreement under which HP will purchase 3Com at a price of $7.90 per share in cash or an enterprise value of approximately $2.7 billion. The terms of the transaction have been approved by the HP and 3Com boards of directors.

NOVEMBER 12, 2009 -- HP and 3Com Corp. have entered into a definitive agreement under which HP will purchase 3Com at a price of $7.90 per share in cash or an enterprise value of approximately $2.7 billion. The terms of the transaction have been approved by the HP and 3Com boards of directors.

“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.”

“Our extensive product line and innovative technology together with HP’s breadth and scale will expand our global opportunity,” said Bob Mao, CEO, 3Com. “3Com’s networking products are based on a modern architecture which has been designed to offer better performance, require less power, and eliminate administrative complexity when compared against current network offerings. Our products are enterprise proven and widely deployed in the world’s largest banks, manufacturers, Internet service providers, public utilities, and retailers.”

HP believes the acquisition of 3Com will dramatically expand its Ethernet switching offerings, add routing products, and significantly strengthen the company’s position in China via the H3C offerings. In addition, the combination will add a large research and development team in China.

HP also noted 3Com’s network security capabilities through its TippingPoint portfolio. Approximately 30 percent of the Fortune 1000 companies have already deployed TippingPoint intrusion prevention systems, the companies say.

“We are confident that we can run our entire global business of 300,000-plus employees, including our next-generation data centers, entirely on the new HP networking solutions,” said Randy Mott, executive vice president and chief information officer, HP. “Based on our experience and extensive testing of 3Com’s products, we are planning to undertake a global rollout within HP as soon as possible after the completion of the acquisition.”

Under the terms of the merger agreement, 3Com stockholders will receive $7.90 for each share of 3Com common stock that they hold at the closing of the merger. The acquisition is subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals and the approval of 3Com’s stockholders. The transaction is expected to close in the first half of calendar 2010.

HP anticipates that the transaction will be slightly dilutive to fiscal 2010 non-GAAP earnings.

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