Huawei Technologies will set up a joint venture with US security
software maker Symantec Corp, a bold return into the US$40-billion
network security and data storage sector for China's top telecom
equipment maker.
The two firms are close to finalizing a deal, which could be
announced as early as May, a source familiar with the negotiations
said.
The joint venture would enable Huawei to compete with technology
giants Hewlett-Packard, IBM and EMC.
Symantec, meanwhile, best known for its Norton anti-virus
programs, has experienced weak revenue growth from its software
that helps run corporate data storage centers, a business it
acquired in July 2005, when it purchased Veritas Software, a
US-based storage software maker, for US$13.5 billion.
Symantec is betting the joint venture will help give its
security and data management group a needed boost.
For Huawei, the partnership with Symantec marks the company's
comeback to the enterprise communications market.
In 2003, privately-held Huawei formed a 51-49 joint venture with
US-based 3Com, a maker of communications network equipment and
software, called H3C. Huawei sold a 2 percent stake in the company
to 3Com in 2005 for US$28 million and the remaining 49 percent for
US$882 million late last year.
The sale marked Huawei's pull-out of the enterprise
communications market. In 2006, however, the Shenzhen-headquartered
firm established a line-up of storage and network security in
preparation for a comeback, the industry source said.
"Huawei wants to ensure it has a complete product line-up in the
enterprise sector," the source said.
The source would not disclose the size of the stake Huawei and
Symantec will take in the planned joint venture or how much they
will invest.
Representatives from Huawei and Symantec were not available for
comment yesterday.
Shenzhen-headquartered Huawei recorded annual revenue last year
of 65.6 billion yuan, with overseas sales accounting for 65
percent.
(China Daily April 24, 2007)