HP acquires networking firm 3com for $2.7 billion

HP is aiming to make its entry into the networking market, because of this economic downturn the sales of their PCs and printer ink have shown some declination. After its big success of acquiring Electronic Data Systems last year, HP now taking the advantage of recession times and aims networking cloud by acquiring 3com popularly known for its networking equipment, for $2.7 billion or $7.90 per share.

3com has 30% of the networking market and HP becomes the second-biggest company in the $40 billion networking market worldwide after Cisco Systems once it purchases the 3com. The deal has been approved by both the companies’ board of directors and is expected to close in the first half part of 2010. HP reports that their move to buy 3com strengthens their position in China and will bring dramatic change in HP’s Ethernet switching offerings and add routing solutions as well.

The stock of 3com have been soared upwards to 35% making it $7.66 per share and the deal was announced at the day’s end of the market, whereas the HP shares seen a drop of 1% in its extended trading, to $49.64. HP is making its own plans and targets to set up a next generation data center to converge server, storage, networking and more.

3Com President and COO Ron Sege said he hoped that combining with HP’s scale and large sales organization would allow him to get his products close to the market quicker. “I want to be able to grow faster, now we’re going to have it,” he said.

[via usatoday]

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