Despite government disapproval, 3Com still wants acquisition

Shareholders at networking solutions provider 3Com on Friday voted to approve a $2.2 billion buyout, despite the deal being halted a day earlier over U.S. security concerns.

The acquirers – Bain Capital Partners and its Chinese telecommunications partner Huawei Technologies – decided to pull out of the agreement after being told the federal Committee on Foreign Investment in the United States (CFIUS) opposed the deal.

The CFIUS was the same agency that opposed Israel-based Check Point Software Technologies' plans in 2006 to acquire Sourcefire, which provides network security for many U.S. government agencies.

Under the buyout of 3Com, Huawei would own a minority stake.

3Com, which owns intrusion prevention system maker TippingPoint, also said in a statement Friday that it planned to claim a $66 million termination fee over the merger pullout.

Bain has said it tried to make several concessions that would have allowed for CFIUS approval, including the divestment of TippingPoint.

An initial public offering was planned for TippingPoint prior to last fall's merger.

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