Huawei is resisting calls to divest recently acquired U.S. server technology firm 3Leaf. It's opting instead to wait for a decision from the White House before taking action. China's largest phone network maker says it's missed the best opportunity to enter the North American market. But the company is still expecting access to the communicating networks facility market.

Back in May last year, Huawei acquired server technology firm 3Leaf for 2 million U.S. dollars.

After completing its review of the deal, the U.S. Committee on Foreign Investment, suggested Huawei should voluntarily divest the technology assets bought from 3Leaf. The announcement was made after some U.S. lawmakers said the deal struck by the Shenzhen-based privately-held company threatened national security.

Huawei's Washington office says the company's refusal to drop the 3Leaf purchase gives U.S. President Barack Obama 15 days to take a stand on the panel's suggestion.

Huawei says the 3Leaf case isn't an isolated one. The world's third-largest seller of telecom network equipment also sought to buy 3Com Corp. in 2008, but abandoned its bid because of U.S. security concerns. Hewlett-Packard then acquired the company the next year.

The U.S. government is considering whether the company's phone networks could pose national-security risks. Members of Congress wrote at least two letters last year expressing concerns over the company's activities in the U.S.. A third letter last week raised concerns specifically about the 3Leaf purchase.

Yu Chengdong, Huawei's Chief Marketing Officer, says if Huawei was given the opportunity to enter the North American market, it could soon become the dominant telecom supplier. But at this stage, that opportunity is looking less and less likely.

Huawei is not the only Chinese company that's run into such barriers in the U.S. market. China's Northwest Nonferrous International Investment Company, and Anshan Steel's investments in the U.S. have also encountered similar difficulties.

Go to Forum >>0 Comments