HONG KONG (Reuters) - Hewlett-Packard will sell a controlling 51 per cent stake in its China-based data-networking business to China's Tsinghua Unigroup for at least US$2.3 billion (S$3.07 billion), forming a partnership designed to create a Chinese technology powerhouse.
State-backed Tsinghua Holdings' subsidiary Unisplendour Corp Ltd will acquire 51 per cent of HP's H3C Technologies for at least US$2.3 billion, Unisplendour said in a statement to the Shenzhen stock exchange late on Thursday.
The U.S. 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.
Western tech companies have struggled for customers in China after former U.S. National Security Agency contractor Edward Snowden's revelations of cyberspying programmes involving U.S. firms. Many of these Western companies are now seeking local partners or selling off assets altogether to Chinese buyers.
HP said in its statement it valued its H3C business at US$4.5 billion. The company had previously valued the unit at US$5.5 billion, people with knowledge of the matter told Reuters last month.