European regulators are giving their approval to HP's $2.7 billion bid for networking equipment maker 3Com, a move that will bolster HP's ProCurve networking business, give it a greater presence in China and add to its converged data center solutions capabilities in its growing competition with the likes of IBM, Cisco, Dell and Oracle.
The European Commission has given its approval to Hewlett-Packard's $2.7
billion bid to buying networking equipment maker 3Com.
In a statement released Feb. 12, the European regulators said
they had concluded their investigation of the proposed deal-focusing
particularly on the router and switch market-and determined that there were no
"The Commission's investigation confirmed that the merged
company would continue to face a number of global and effective competitors,
giving customers the choice from a range of alternative providers for switches
and routers," the EC said in a statement.
The regulators also said there were no concerns about antitrust
issues in ancillary areas, such as IT services.
HP officials are
looking to 3Com
to help it build out its ProCurve networking business as it
looks to increase its competition with Cisco Systems and to grow its capabilities
in the increasingly competitive push for converged data center solutions.
here to see what HP gets from buying 3Com.
Before the deal was announced in November, industry research
firm The Yankee Group estimated that Cisco owned about 52 percent of the $40
billion networking market, with HP at 11 percent and 3Com at 9 percent. With
3Com under its wing, HP is now a competitor with about 20 percent of the
HP officials expect to close the deal in the second quarter.
Adding 3Com to the mix will give HP greater offerings in the
core networking space, will enable HP to add 3Com's Tipping Point network
security business and will give HP a larger presence in the all-important
Building out its networking capability also will give HP a
stronger play in the converged data center space, where rivals such as Cisco, IBM,
Oracle and Dell all are looking for ways to give customers more tightly
integrated solutions that combine server, storage, networking and management
HP is looking to make the bulk of its converged data center
solutions come from in-house, which makes the 3Com deal particularly important.
HP announced its bid for 3Com six months after 3Com
the worldwide networking market. The company had exited the
global enterprise space more than five years ago to focus on its SMB products,
but announced at the Interop show in Las Vegas
in May 2009 that it was getting back into the game on the strength of its H3C
business in China.