Hewlett-Packard said Wednesday it plans to acquire 3Com, maker of network switching and routing products.
The deal is valued at US$2.7 billion, or US$7.90 per share. HP says the purchase is intended to boost its networking business, particularly in China, where 3Com has a strong presence.
"By combining HP ProCurve offerings with 3Com's extensive set of solutions, we will enable customers to build a next-generation network infrastructure that supports customer needs from the edge of the network to the heart of the data center," Dave Donatelli, executive vice president and general manager of HP's Enterprise Servers and Networking business said in a statement.
The 3Com deal is the most recent in a string of enterprise-related acquisitions HP has made in the past year, including most recently file serving software maker Ibrix. HP wants to be a leader in providing customers with an integrated stack of computing technology ranging from servers and storage at the foundation all the way up to services, Chairman and CEO Mark Hurd said at a Gartner conference in October. But to be competitive these days, a company has to fully commit to each element of the stack.
"You can't be in any one of them as a hobby," he said. "Compared to any competitor, you have to bring a combination of low cost and total cost of ownership, supported by innovation."
The 3Com deal is expected to close in the first half of 2010. HP stock barely registered the news, inching up 0.08 percent to US$50 in after-hours trading Wednesday. 3Com's stock rose 5.18 percent to US$5.69.
CNET News' Stephen Shankland contributed to this report.
This article was first published as a blog post on CNET News.
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