(MENAFN- ProactiveInvestors) Hewlett-Packard () sold a majority stake in its Chinese server storage and technology assets for $2.3 billion to state-owned Tsinghua University. Shares rose.
A group owned by the Chinese university Tsinghua Holdings will purchase the 51 percent stake in a new business called H3C. The deal values the businesses at $4.5 billion net of cash and debt the companies said in a statement today.
In addition to a 49 percent stake which is based in Palo Alto California will retain the right to appoint H3C’s chairman and chief financial officer the Wall Stree Journl reported today citing people familiar with the plan.
The U.S. company is the first major foreign firm to pass control of Chinese operations to local owners since the government stepped up restrictions on overseas hardware companies.
China has been encouraging the use of local suppliers and aims to purge most foreign technology from the country’s banks military and government enterprises by 2020 Bloomberg reported in December citing people with knowledge of the matter.
will maintain ownership of its other businesses in China including business services software Helion Cloud and other operations.
Shares of gained 2 percent to $33.74 at 1:53 p.m. in New York paring this year’s slump to 16 percent.
Under the deal H3C will become a subsidiary of Unisplendour a publicly traded unit of Tsinghua Holdings. Unisplendour a software vendors and system integrator has been in a long-term strategic distribution partnership with Hewlett-Packard since 1999.
H3C will have about 8000 staffers and $3.1 billion in annual revenue. said the change will allow it to better serve customers in China.
inherited H3C when it bought 3Com Corp. in 2010 for about $3 billion. H3C was formed in 2003 as a joint-venture between China’s Huawei Technologies Co. and 3Com. The H in its name stands for Huawei and the 3C for 3Com. The venture quickly grew into a force in the mainland telecommunications market before 3Com bought out Huawei in 2006.
Hewlett Packard is undergoing a broader restructuring as it prepares to split into two companies by October 31.
The H3C transaction is expected to close around the end of the year
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