3Com sues Bain Capital over failed Huawei deal

Network solutions firm 3Com is suing private equity company Bain Capital Partners in a bid to win USD66m in deal termination fees, reports Reuters. This follows Bain’s decision to pull out of a joint takeover with Huawei of 3Com.

US-based 3Com filed a lawsuit against Bain affiliate, Diamond II Holdings, at a Delaware court. The company alleges that terms of the planned USD2.2bn takeover were breached after Bain pulled out of the deal in March 2008.

Bain agreed to join Chinese telco equipment manufacturer, Huawei, in buying 3Com in September 2007. The deal was expected to be completed by Q1 2008. However, security fears and opposition by the US’s Committee on Foreign Investment caused the negotiations to falter and revised terms could not be met.

3Com makes networking and data products for small businesses and also has contracts with the US government. Critics of the takeover – which included some 3Com shareholders – said that selling to Huawei, which has close ties with the Chinese government, could lead to compromised US national security.

Technorati labels: , ,

Published by Reinout te Brake

Reinout is a games investor and strategic business consultant specializing in the games industry. Reinout established his credentials through his own successful investments, start-ups, consulting and (advisory) board positions that led through time to strong bonds with key stakeholders in this fast paced industry. He is known for his outstanding results in the gaming industry. He has worked with many game studios around the globe and is therefore well known in the international gaming industry. Check out his games podcast; https://www.game-consultant.com

%d bloggers like this: