Hewlett-Packard is reportedly looking for potential buyers of its China-based business unit, H3C Technologies, in order to return the unit to local control.
Sources of the Wall Street Journal said that the total value of the business could be worth around $5 billion, but HP aims to sell only 51 percent of it. The company is looking for a local buyer to win approval from the Chinese government. American technology companies including Cisco, IBM, and Microsoft have been accused of collecting data and other information overseas for the U.S. government.
H3C Technologies is a leading supplier of IP-based products based in Hangzhou, China formed in 2003 by Huawei Technologies and 3Com. HP acquired the unit when it bought 3Com in 2010.
HP is currently reordering its businesses, and it could be that it chose to let go H3C because it is just a small part of the company revenue. The unit sales for 2013 rounded up $2.53 billion, up by 1.8 percent from 2012. However, the overall performance of the business units in the region was down by 5 percent. HP intends to sell only half of the networking unit so that it can still retain some of the income while sharing half of the operational costs with the buyer.
"There's huge, major shifts going on in the networking industry with people refocusing on core areas," Andre Kindness, an analyst at Forrester Research, said in an interview with Bloomberg. "If you look at HP, going down the split, H3C in China is probably too much to manage at the moment."
Names of the prospective buyers were not disclosed, but the source said that HP intends to sell it to a local private equity firm.
The report seemed to confirm an early report that HP is planning to separate its computer and printer businesses from its corporate hardware and services operations in order to increase its overall revenue. The plans were reportedly to be finalized by October 2015.
HP refused to comment about the report.
