Huawei Buyout Sinks 3Com

Shares fall 8% in heavy trading.
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Updated from Nov. 28

3Com

(COMS)

sank 8% in early action Wednesday following news of the company's agreement to buy out a big technology partner's stake in a cheap router venture.

3Com said late Tuesday it plans to pay $882 million to buy

Huawei Technologies'

49% stake in the companies' Huawei-3Com joint venture.

The agreement was reached through a bid process under an agreement that enabled either party to make cash bids to buy the other party's shares in H3C.

3Com initiated the process with a bid on Nov. 15. Its last bid was accepted by Huawei on Monday.

The transaction is subject to "customary approval" in China, according to a press release issued by 3Com.

Under the existing shareholders' agreement, the parties have agreed that the selling shareholder in the bid process would, under certain circumstances, be subject to a noncompete provision for 18 months after the closing.

3Com said it will communicate details of its financing plans for the acquisition at a future date.

Shares fell 37 cents Wednesday to $4.12.