Hewlett-Packard Co (HP) is seeking to sell part of its H3C Technologies Co (華三通信技術) networking subsidiary, a person with knowledge of the matter said.
The company plans to sell about 51 percent of its stake in the Hangzhou-based business to an Asian buyer, said the person, who asked not to be identified because the process is private.
H3C sells networking equipment and software products, and the business is valued at around US$5 billion, the person said.
Sarah Pompei, a spokeswoman for Palo Alto, California-based HP, declined to comment. The discussions were reported on Friday by the the Wall Street Journal.
HP is considering divesting businesses after earlier this month saying that it plans to split into two companies, using a breakup to become nimbler.
Chief executive officer Meg Whitman is set to lead Hewlett-Packard Enterprise, which plans to focus on corporate hardware and services, while Dion Weisler, vice president in charge of personal-computer and printer operations, is scheduled to become chief executive officer of that business, called HP Inc.
HP acquired H3C in 2010 as part of a deal to buy networking company 3Com Corp.
H3C was previously owned by 3Com and Chinese networking provider Huawei Technologies Co (華為); 3Com bought out Huawei’s stake in the business in early 2007.
Networking is a small part of HP’s business — the networking group generated sales of US$2.53 billion in fiscal 2013, up 1.8 percent from the previous year, according to the company’s annual report.
HP’s sales in the Asia-Pacific region represented 19 percent of its total US$112.3 billion in revenue in fiscal 2013, down 5 percent from fiscal 2012.
H3C was established in 2003 and has 4,800 employees, according to the company’s Web site.
The Chinese government has been developing local technology companies, giving them public sector information-technology contracts, according to a report in the state-run People’s Daily newspaper in July.
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