Wow! China is really buying up America! It’s been a long time

Wow! China is really buying up America! It’s been a long time coming with its Chinese expansion plans, but to sell?

Shares of Hewlett-Packard Company were down Friday, as sources said the company is nearing a deal to sell control of its data-networking business in China, H3C Technologies, to Tsinghua Unigroup Ltd. Tsinghua Unigroup stands as the preferred bidder in an auction of 51 percent of the business unit, which is roughly $5 billion.

JPMorgan’s Rod Hall sees this move having a slight positive impact on Hewlett-Packard. He cites the Wall Street Journal, which says, “a deal between the two parties, which could also include a separate server operation, may still be a few weeks away and there is no guarantee that another bidder won’t re-emerge. Tsinghua Unigroup had been competing with other bidders for the business, which is worth roughly $5bn in total, including China Huaxin Post and Telecommunication Economy Development Center.”

JPMorgan analysts believe that “~40% of HP’s switching revenue of ~$2.6bn is generated in China and mostly through H3C. However, margins in the business may be low due to networking operating margins of just 15% for HPQ.”

Source Bloomberg