3Com Corporation and Huawei Technologies Co. (Shenzhen, China) recently announced that all government approvals have been secured and the agreements establishing the joint venture have been signed by the parties.

Domiciled in Hong Kong with principal operations in Hangzhou, China, and sales offices throughout China and Japan, Huawei-3Com Co., Ltd., will deliver enterprise networking solutions including routers and LAN switches. 3Com has the rights to market and support the Huawei-3Com products under the 3Com brand in all countries except China and Japan. In China and Japan, Huawei-3Com will sell products sourced internally as well as from 3Com.

Huawei is contributing to Huawei-3Com its enterprise networking business assets, including LAN switches and routers, engineering and sales/marketing resources and personnel, and licenses to its related intellectual property. 3Com is contributing $160 million in cash, assets related to its operations in China and Japan, and licenses to certain intellectual property. In two years, 3Com has the right to acquire a majority ownership interest in Huawei-3Com.

"By leveraging the enormous capabilities of our new joint venture, 3Com intends to fundamentally change the playing field in the enterprise networking industry," said Bruce Claflin, 3Com president and chief executive officer, and Huawei-3Com chairman. "3Com now has one of the broadest lines of networking products in the world, including a full suite of voice and data solutions, for both wired and wireless environments. Backed by 3Com's global service, these solutions excel in quality, capability and value."

Outside China and Japan, 3Com will leverage its world-class distribution channel partners to extend the reach of the Huawei-3Com products. 3Com will provide resellers access to its broadened line of voice and data networking products, ranging from entry-level switches to high-end routers with both wired and wireless access, all at attractive margins. As Huawei-3Com begins operations, there will be approximately 1,500 employees based in China derived primarily from Huawei but with additional resources from 3Com as well as newly hired employees.

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