Fergie's Tech Blog

U.S. Security Concerns Scuttle Bain/Huawei Bid for 3Com

Grant Gross writes on InfoWorld:

A deal for Bain Capital Partners and China's Huawei Technologies to buy 3Com is on hold because the companies were unable to come to agreement with the U.S. Committee on Foreign Investment in the United States (CFIUS) about security concerns.

The three companies have withdrawn their joint filing with CFIUS, although they remain committed to continued discussions, they announced Wednesday.

Among the critics of the deal was U.S. Representative Thaddeus McCotter, a Michigan Republican. Huawei's stake in 3Com, which markets intrusion detection systems, would "gravely compromise" U.S. national security, he said in a House floor speech in October. The U.S. Department of Defense uses 3Com intrusion detection products, and Chinese hackers have targeted the agency, McCotter said.

posted by Fergie @ 2/20/2008 09:58:00 PM