HP trades ‘ownership’ for ‘partnership’

Hewlett-Packard sells its 51 percent stake in Chinese Tsinghua and forms a partnership

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

Hewlett-Packard will sell a controlling 51 percent stake in its China-based data-networking business to China's Tsinghua Unigroup for at least $2.3 billion, forming a partnership designed to create a Chinese technology powerhouse.

State-backed Tsinghua Holdings' subsidiary Unisplendour Corp Ltd will acquire 51 percent of HP's H3C Technologies for at least $2.3 billion, Unisplendour said in a statement to the Shenzhen stock exchange late on Thursday.

The US company also said in a statement on Thursday it will form a partnership with Tsinghua Holdings, affiliated with China's elite Tsinghua University, to create a group in China to house H3C's networking operation alongside its China-based server, data-storage and technology-services businesses.

HP said in its statement it valued its H3C business at $4.5 billion. The company had previously valued the unit at $5.5 billion, people with knowledge of the matter told Reuters last month.

Western tech companies have struggled for customers in China after former U.S. National Security Agency contractor Edward Snowden's revelations of a cyber-spying program involving US firms. Many of these Western companies are now seeking local partners or selling off theirs assets altogether to Chinese buyers.