Bain, Chinese Firm Buy 3Com

US will check telecommunication buyout for security risks
By Asta Hostetter,  Newser User
Posted Sep 30, 2007 5:14 PM CDT
Bain, Chinese Firm Buy 3Com
A worker assembles parts in the manufacturing center of Hua Wei Technologies Co. Ltd. in Shenzhen, China, March 28, 2005. Huawei Technologies is a private high-tech enterprise in China specializing in   (KRT Photos)

Chinese company Huawei Technologies Co. will help private equity firm Bain Capital buy 3Com Corp., a flailing US telecommunications company, by picking up almost 20% of the tab. Recently Chinese businesses have bought strategic stakes in US companies rather than full buyouts to skirt political scrutiny, which can lead to a deal collapse, reports the WS Journal.

Huawei is the largest telecommunications company in China, prompting a thorough vetting by Washington for security risks to American networks. Though shares in 3Com traded high in the 90’s, one expert said it's in "one of the industry's longest death spirals,"  due to bad purchases and effects of the post-boom Internet bust. (Read more telecommunications stories.)

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