China's Huawei to reverse controversial deal for 3Leaf

A U.S. acquisition deal by Chinese network equipment maker Huawei had drawn scrutiny over national security concerns

Chinese network equipment supplier Huawei has reversed its stance and has accepted a U.S. panel's recommendation to voluntarily divest from a business acquisition that had drawn national security concerns.

Huawei said in a statement on Saturday that the company has agreed to follow the recommendation of the Committee on Foreign Investment in the United States (CFIUS) by stopping to acquire specific assets from a U.S. startup.

In May, Huawei had paid US$2 million to buy intellectual property from 3Leaf Systems, which specializes in building servers to run together as more powerful mainframe computers. The deal, however, has come under scrutiny from the U.S. government, because it was cleared without the approval from CFIUS. Government officials then asked Huawei to place the deal under the review of CFIUS.

Huawei already purchased the intellectual property and hired staff from 3Leaf Systems, so it's unclear how the deal would be reversed.

Earlier this week, the Chinese company had said it declined the CFIUS's recommendation to voluntarily divest from acquisition. Huawei's move likely would have forced President Barack Obama to make a decision and resolve the matter.

"The significant impact and attention that the transaction has caused were not what we intended," Huawei said in its statement. "Rather, our intention was to go through all the procedures to reveal the truth about Huawei."

Huawei has drawn accusations from U.S. officials that the company is linked to the Chinese military. The alleged ties has made it difficult for the company to complete certain U.S. business deals in the past. Huawei, however, denies any such ties to the Chinese military, stressing that the company is completely employee-owned.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags business issuesHuawei TechnologiesMergers / acquisitions3Leaf Systemsregulationgovernment

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Michael Kan

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?