New | Chinese state-owned firms wrangle over right to bid for HP data assets
Huaxin's authorised bid for a 51pc stake in HP business in doubt after higher offer from rival
The bidding for a controlling stake in Hewlett-Packard's data-networking business in China, worth more than US$2 billion, has led to a rare tussle between two state-backed firms over which has Beijing's backing.
The spat involving China Huaxin Post and Telecommunication Economy Development Centre and Tsinghua Unigroup could prolong the sale negotiations, and highlights the complexity of cross-border investment policies that Beijing has sought to streamline.
On February 15, the National Development and Reform Commission approved Shanghai-based Huaxin to bid for a 51 per cent stake in H3C Technologies. Unigroup had since come in with a higher offer, but without NDRC approval, and was now in talks with the regulator for permission to pursue the unit, valued by HP at US$5.5 billion, sources said.
The central government generally backs a single contender as major cross-border acquisitions progress into advanced stages.
Both contenders have closed significant cross-border technology deals in recent years, with Huaxin buying an 85 per cent stake in Alcatel-Lucent's enterprise computing business, and Unigroup receiving a US$1.5 billion investment from Intel.
Huaxin has contested the late involvement of Unigroup, which pulled off a similar transaction without approval two years ago.