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Bain Halts 3Com Buyout

Bain Capital, the Boston-based asset management firm co-founded by Mitt Romney, has suspended a joint effort with China’s Huawei Technology to acquire Marlborough, MA-based 3Com for a proposed $2.2 bilion in cash, 3Com reported today. Bain and Huawei withdrew their joint filing with the U.S. government’s Committee on Foreign Investment in the United States, which has proved unwilling to okay the deal. According to PE Week and other reports, U.S. legislators were concerned about Chinese ownership of 3Com, whose TippingPoint subsidiary makes security software for the government; apparently, Bain, Huawei, and CFIUS were unable to settle on “mitigation” terms under which TippingPoint would be excluded from the merger. “We are very disappointed that we were unable to reach a mitigation agreement with CFIUS for this transaction,” Edgar Masri, 3Com’s president and CEO, said in a statement.

Wade Roush is Xconomy's chief correspondent. You can e-mail him at wroush@xconomy.com, call him at (617) 252-7323, or follow him on Twitter at http://twitter.com/wroush.

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