Hewlett-Packard Company (HP) has agreed to sell a controlling stake of its China-based unit to one of Tsinghua Holdings subsidiaries. The resulting unit is seen to become the top leader when it comes to technology services in the said Asian country.

NEW PARTNERSHIP

Earlier, Tsinghua Unigroup disclosed to the Shenzhen stock exchange that they plan to buy 51% of HP's H3C Technologies for at least $2.3 billion. HP, a US company, confirmed the sale of its China-based data-networking business.

A joint venture will be formed between HP and Tsinghua Holdings, particularly with its subsidiary Unisplendour Corp Ltd.

Tsinghua Holdings is also an associate of Tsinghua University, a school for China's affluent families. The new business is set to accommodate H3C's networking operation as well as its China-based server, data-storage and technology-services businesses. The current total value of the H3C business is $4.5 billion, with a previous net worth of $5.5 billion.

FUTURE PLANS

HP foresees the new H3C to generate $3.1 billion of sales annually and will be the forefront in networking, storage, servers and technology services. HP will have the right to appoint the Chairman and Chief Financial officer for HC3. It will still fully own its China-based PC and printing, Wi-Fi hardware (Aruba Networks), software, cloud services and enterprise service operations.

The remaining assets are said to be less politically-susceptible. HP is one of the Western technological companies that have tried to enter the Chinese market despite difficulties arising from exposures on cyber spying which some US firms are said to be engaged in.

According to a source, other companies such as Microsoft and Amazon find it hard to negotiate with China. H3C is a Chinese data networking business that makes switches, wireless LAN hardware and routers.

The said preliminary agreement between HP and Tsinghua Unigroup is expected to generate more employment, economic development and good business ties between the Western and Asian nation.