HPE To Offload Remaining Stake In China Joint Venture

Hewlett Packard Enterprise (HPE) is selling its remaining interest in China-based joint venture H3C, despite claiming it was pleased by growth in the Chinese market a few months ago, Dan Robinson reported for The Register.

Photo Insert: The Hewlett Packard Enterprise (HPE) Houston campus

H3C is a provider of IT equipment in China, including HPE servers, storage and associated technical services. It is 49 percent owned by HPE, with the remainder owned by China-based IT services company Unisplendour Corporation, following a deal in which HPE sold it a controlling share in 2015 for an estimated $2.3 billion.

That deal contained an agreement that HPE could put to Unisplendour all of the remaining shares of H3C in exchange for a cash sum equivalent to 15 times the company’s previous 12 months of post-tax profits, with a deadline of October 31 last year.

HPE extended the agreement to December 31, but has now decided to exercise that right, according to a Form 8-K filed with the US Securities and Exchange Commission (SEC) today.

HPE confirmed to The Register that it plans to sell its stake in H3C to Unisplendour.

“Our joint venture in H3C Technologies Co. has served HPE well for many years, producing financial benefits for our business and our shareholders while enabling us to accelerate the digital transformations of customers throughout China and around the globe,” it said in an email.

“With the expiration of our financial put option, the time is right for us to evolve the financial structure of our partnership with H3C during a period in which the entire IT industry is shifting rapidly.”

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