Case Detail

In re 3Com Acquisition
(Regulatory Proceeding)
The sale of 3Com Corp. to a group that includes a Chinese corporation with ties to the Chinese military has been put on indefinite hold, after the group in February 1998 withdrew its application for approval of the acquisition by CFIUS (the Committee on Foreign Investment in the United States). CFIUS, a federal government agency that reviews acquisitions of U.S. assets by foreigners, apparently had raised a variety of national security objections. The roadblock to acquisition was a victory for WLF, which in January had written to CFIUS, urging it not to approve the deal as structured. WLF argued that the proposed deal needed to be overhauled to ensure that sensitive military-related technology did not fall into enemy hands. WLF's letter said that the 3Com Corp. acquisition, as currently structured, "raises grave national security concerns." Bain said later that it may seek to negotiate a restructured acquisition agreement that alleviates national security concerns.
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