HP’s acquisition of 3Com will help it compete against Cisco in China.

Hewlett Packard (HP) has announced it is to acquire 3Com – a leading provider of networking switching, routing and security solutions – in a deal worth $2.7 billion (£1.6bn).

A joint statement from the two companies said it expects the acquisition to primarily boost HP’s position in China, one of the world’s fastest growing markets – an area in which 3Com has a strong base.

HP says that the implementation of a large research team in the country will help drive the acceleration of innovations to HP’s networking solutions.

“By acquiring 3Com, we are accelerating the execution of our Converged Infrastructure strategy and bringing disruptive change to the networking industry,” said Dave Donatelli, Executive Vice-President and General Manager, Enterprise Servers and Networking, HP.

The world’s largest computer maker is expected to seal the acquisition, pending regulatory approvals, in the first half of 2010.

“By combining HP ProCurve offerings with 3Com’s extensive set of solutions, we will enable customers to build a next-generation network infrastructure that supports customer needs from the edge of the network to the heart of the data centre.”

Bob Mao, CEO of 3Com, said: “Our extensive product line and innovative technology together with HP’s breadth and scale will expand our global opportunity.

“3Com’s networking products are based on a modern architecture which has been designed to offer better performance, require less power and eliminate administrative complexity when compared against current network offerings.”

Like many technology firms, HP has been hit by a downturn in spending and reported a drop of 19% in its profits for the three months to 31 July 2009. Earlier this year HP UK announced plans to cut 700 jobs at its manufacturing plants in Scotland and Germany.