Huawei Acquires Symantec's Stake in Huawei Symantec Hong Kong Joint Venture
China based Huawei Technologies said today that it would acquire Symantec's 49 percent stake in Huawei Symantec Technologies, the Hong Kong-based joint venture established by Huawei and Symantec in 2008 that provides IT security, storage and systems management solutions.
Under the agreement Huawei Technologies will pay Symantec $530 million for the 49% stake, giving it full ownership of Huawei Symantec. According a statement from Symantec, the two companies have have held several discussions and negotiations over the future of the joint venture over the past few months, resulting the agreement that it would be best in the hands of a single owner.
With a number of Symantec technologies embedded in Huawei Symantec products, Symantec will continue to receive royalties on certain products on the OEM end.
The agreement is subject to regulatory approvals and other closing conditions and is expected to close in the first quarter of 2012. Until the closing, Huawei and Symantec will continue to comply with their commitments under the existing joint venture agreements.
Security concerns over chips, routers, and other technical equipment coming from China have been highlighted in government reports and in the media recently, and these concerns could have played a part in Symantec’s decision to distance itself from the venture.
This fall Huawei was blocked from participating in a government bid to build a national wireless network for first responders, with the reasoning given being national security concerns. A Pentagon report on the Chinese military singles out Huawei as a company that maintains “close ties” to the People’s Liberation Army.
While Symantec will continue to do business and expand its operations in China, the company appears to believe it will be done best on its own terms, and under its own control.