Hewlett-Packard Company (NYSE:HPQ) has started local search for a potential buyer for its networking business unit in China and the company is likely to sell off a majority stake in the unit. This deal is among one of the latest examples of growing corporate tension between Chinese and American technology firms.
The company is getting in touch with private-equity firms to sell H3C Technologies Co., networking unit of Hewlett-Packard in China, as reported by the Wall Street Journal. The company is likely to sell 51% stakes in H3C, which has net market evaluation of $5 billion. As per the Journal, the buyer is likely to be a Chinese firm to facilitate easy approval from the Chinese government. The networking business is likely to be sold to a private-equity firm and Hewlett-Packard Company (NYSE:HPQ) is likely to retain a considerable minority stake in the company.
The sale of H3C technologies is among one of the latest corporate deals rising from the potential hacking suspicion between China and the United States, as both the countries doubt each other for using telecommunications and Internet services for hacking. In 2012, a report from the U.S. lawmakers doubted Huawei Technology Co Ltd (SHE:002502)’s devices as a potential medium used by Beijing to spy over the American customers.
Hewlett-Packard Company (NYSE:HPQ) has joined other companies including Microsoft Corporation (NASDAQ:MSFT), Cisco Systems, Inc. (NASDAQ:CSCO), and International Business Machines Corp. (NYSE:IBM) facing similar challenges in China.
Earlier, HP was reported to develop a new computer equipped with 3D scanning and projection features. The new computer is likely to be called “Sprout” and the company would unveil it on October 29 along with other products. It is considered as an attempt from the ailing computer manufacturer to offer different computing experience to its users, as said by the CEO, Meg Whitman, of the company.
This article has been written by Prakash Pandey.