HP Acquires 3COM for $2.7 Billion

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Hewlett-Packard (HPQ) announced its acquisition of networking gear outfit 3Com (COMS) for $2.7 billion or $7.90 per share.

The acquisition, which was approved by both companies’ respective boards of directors, will bolster up HP against Cisco (CSCO). The latter is venturing out to HP’s businesses especially after it announced its plan to enter the server market early this year. The acquisition however is still needed to be approved by the stockholders of 3Com. HP is expecting to close the deal by the first half 2010.

HP stated that they want to “transform the networking industry,” and “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.”

The merge will bring together HP’s powerful data center strategy and 3Com’s extensive product line and innovative technology of routing and networking systems.

Meanwhile Brocade (BRCD) another networking solutions company fell victim in the acquisition. It has been shopping for a buyer and HP was one of the potential buyers. After the announcement, that would be highly unlikely.