Calls to block proposed 3Com takeover

The proposed takeover of 3Com by Bain, the private equity firm, and Huawei, the Chinese telecommunications equipment maker, came under further pressure in Washington after lawmakers called on the administration to block the acquisition of the US technology group.
A non-binding resolution introduced by Ileana Ros ­Lehtinen, the most senior Republican on the House foreign affairs committee, said the transaction in its current form threatened national security and should not be approved by the inter-agency panel that investigates foreign transactions. Under the terms of the $2.2bn deal, Huawei will take a minority stake in 3Com.
The move is the most formal objection against the deal to date. It underscores that acquisitions involving sensitive US assets continue to be vulnerable to scrutiny on Capitol Hill in spite of recent legislation designed to instil more confidence in the executive branch Committee on Foreign Investment in the US (Cfius), which is charged with investigating such deals.
Dubai Ports World was forced last year to abandon its bid for US port terminals after lawmakers said the takeover represented a threat.
The scrutiny of the 3Com transactionraises the prospect that lawmakers could try to scupper the deal, which will be reviewed by Cfius. Bain has said it is committed to working with US officials to satisfy them the transaction presents no US national security risks.
The resolution, which was co-sponsored by seven other House members, cited reports that Huawei was one of the "least transparent [companies] in China" and was a supplier of air defence systems to Iraq during the 1990s. It also quoted reports of alleged cyber-attacks on the US by China.
credited by: ft.com