HP Sells China-based, Data-Networking Unit

USA Today recently reported Hewlett-Packard Co. as selling a majority stake in its China-based, data-networking operation to that country’s state-owned, Tsinghua University. The news source said this sale makes HP the first major U.S. tech company to pass control to local owners since the Chinese government increased its ownership restrictions on foreign data firms. HP said it will continue to operate in China, but noted that the  sale resulted from the country’s new policies that encourage the use of local suppliers. Tsinghua University, which owns Tsinghua Holdings, will buy a 51% stake in the new business.

In a May 21 Wall Street Journal report, writers Dana Cimilluca and Eva Dou said the Tsinghua Holdings unit will pay about $2.3 billion for the HP data-network firm, and that HP will keep its businesses that are less politically sensitive.

A May 21 Reuters report said: “Western tech companies have struggled for customers in China after former U.S. National Security Agency contractor Edward Snowden’s revelations of cyberspying program involving U.S. firms. Many of these Western companies are now seeking local partners or selling off assets altogether to Chinese buyers.”

Streetside: Apparently, the Chinese government pushed the sale because of disclosures that the U.S. government collected sensitive data and other information overseas and, in some cases, used infrastructure belonging to American companies. Because of this revelation, the Chinese government is pressuirng U.S. technology companies to find buyers for related (suspected?) businesses.