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3Com Gains Majority Stake In Huawei Joint Venture

MANHASSET, N.Y. — Communications company 3Com Corp. has purchased from Huawei an additional two percent interest in Huawei-3Com Ltd. (H-3C), a China-based joint venture formed by 3Com and Huawei in Nov. 2003.

The sale, completed on Jan. 27 following final approval from the government of the People's Republic of China, gives 3Com a 51 percent of the joint venture. Huawei owns the remaining 49 percent.

Last October, 3Com agreed to pay Huawei $28 million in consideration for 2 percent of the outstanding H-3C shares owned by Huawei. With the change in majority control of the joint venture, 3Com will appoint five directors to the H-3C board of directors and Huawei will appoint four directors.

3Com CEO Scott Murray will become chairman of the joint venture.

According to IDC, Huawei-3Com currently holds 31 percent of the Chinese LAN switch market. 3Com reported that during its calendar third quarter ended Sept. 30, 2005, Huawei-3Com revenue was $111 million, up 69 percent year-over-year.