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Symantec Accepts $530M Buyout From Huawei, Firm with Suspected Ties to Chinese Military

Symantec Accepts $530M Buyout From Huawei, Firm with Suspected Ties to Chinese Military - top government contractors - best government contracting event

Symantec Accepts $530M Buyout From Huawei, Firm with Suspected Ties to Chinese Military - top government contractors - best government contracting eventChinese telecommunications firm Huawei, which currently owns 51 percent of a joint venture with Symantec, has agreed to purchase the 49 percent it doesn’t own from the American security company.

Symantec said it has reached an agreement to sell its 49 percent stake for $530 million, giving Huawei full ownership of the Hong Kong-based security and storage products provider.

The two companies formed the venture, called Huawei Symantec, in 2008. Reuters reported that each company initially fronted $150 million, leaving Symantec with a positive return, although the buyout price was lower than many analysts’ expectations.

There has been a lot buzz surrounding Huawei, the world’s second largest telecommunications infrastructure equipment manufacturer, which has recently responded to accusations it maintains potentially strong ties with the Chinese military or government, the Mainchini Daily News reported today.

Those attacks have targeted the top of the organization,which was founded in the late 1980s and is currently led by CEO Ren Zhengfei, a former Chinese military officer, according to Reuters.

The merger could cause potential national security issues as Symantec provides computer security products to the U.S. government and the joint venture owns more than 900 patents, according to its website.

Security concerns have hounded Huawei earlier this year as it was forced to abandon a proposed $2 million acquisition of U.S. computer firm 3Leaf Systems after the U.S. voiced security concerns about the deal.

The Pentagon requested Huawei seek clearance from the Committee on Foreign Investment in the United States, which recommended on Feb. 11 that Huawei back out of the deal, the NY Times reported.

Over the past several years, Symantec has generated tremendous growth and demand for their products in the East, Enrique Salem, president and CEO of Symantec, said in a statement. He identified China as one of the company's fastest growing markets, with 46 percent growth over the last three fiscal years.

“Symantec achieved the objectives we set four years ago and exited the joint venture with a good return on our investment, increased penetration into China and a growing appliance business,” said Salem.

The companies reported the deal is scheduled to be completed by the first quarter of 2012.

Regardless of its role in this particular case, the government’s repeated interaction with Huawei could indicate the government is playing an increasingly large roll in how American firms can conduct business with foreigners.

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