[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

[ISN] Bain quiet about probe into 3Com acquisition


By Grant Gross
January 02, 2008 
IDG News Service

WASHINGTON -- Bain Capital LLC, a Boston-based equity investment firm, 
declined to comment today on news reports that a federal government 
panel reviewing a proposed acquisition of networking vendor 3Com Corp. 
plans to extend its review.

Bain would get an 83.5% stake in 3Com, and Chinese networking giant 
Huawei Technologies Co. would get the remaining piece in the $2.2 
billion deal. The Committee on Foreign Investment in the United States 
(CFIUS), part of the U.S. Department of Treasury, is investigating 
whether the investment by Huawei poses a risk to national security after 
Bain voluntarily submitted the deal for review in October.

Normally, a CFIUS review runs for 30 days, but the interagency committee 
can take another 45 days. The Financial Times on Tuesday reported that 
CFIUS this week would likely take the additional time.

A Bain spokesman declined to comment on the news report, saying the 
CFIUS review was a "confidential process."

"Bain Capital is working closely with CFIUS to provide U.S. officials 
with information about the proposed transaction," the company said in a 
statement. "As stated previously, we believe CFIUS will conclude that 
the company will remain firmly in the control of an American firm, has 
only a small minority foreign shareholder, and that the deal presents no 
risks to national security."

Some critics have disagreed. Rep. Thaddeus McCotter (R-Mich.) has called 
on CFIUS to reject the deal. 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. "Given this 
and other instances of communist China's persistent cyberwarfare against 
us, approving this sale would be an abject abdication of CIFUS' duty to 
protect America's vital defense technologies from enemy acquisition," he 

Visit InfoSec News