Hewlett-Packard announced Thursday that it will sell 51 percent of its stake in its Chinese server to Tsinghua Holdings for $2.3 billion.
The sale will create a new business that the information technology company will call H3C, which will be worth $4.5 billion, making it a leader in China in terms of computer servers, storage and technology services.
Tsinghua is a company with 8,000 employees, and the new H3C is recomputed to gain a revenue of $3.1 billion.
"HP is making a bold move to win in today's China. Partnering with Tsinghua, one of China's most respected institutions, the new H3C will be able to drive even greater innovation for China, in China," said Meg Whitman, HP's chairman and chief executive, according to NDTV Gadgets.
HP made it clear that the deal will not affect its existing operations in China, which included its enterprise services, personal computer business and other operations outside the stake it sold to Tsinghua. All other business will remain to be in the ownership of the California group.
China has been campaigning for the use of local suppliers in its efforts to purge out foreign technology from the country and its banks. Through selling the businesses to Chinese investors, HP is looking to win sales to state-owned companies, Bloomberg reported.
HP had a rougher than expected quarter last year, with the struggle pointed towards China. The new deal will hopefully change this tide to the company's benefit.
