Hewlett Packard Enterprise has quietly revised the timeline for its stake sale in Chinese cloud services company H3C and announced it would sell part of its Communications Technology Group (CTG).
“Our priority is to focus on the markets most relevant to our customers’ needs across edge, hybrid cloud and AI. Sometimes this means identifying areas of the business that can be better nurtured and grown through a separate company or partner,” HPE CFO Marie Myers said in a blog post announcing the CTG sale.
Last year, HPE agreed to sell a 49% stake in H3C to majority shareholder Unisplendour International Technology. That agreement has now been amended, the company said in an SEC filing on Friday.
HPE will initially sell 30 percent of H3C’s total share capital to Unisplendor by Aug. 31 for $2.1 billion, with the right to sell the remaining 19 percent for approximately $1.4 billion within three years of the transaction closing. The transaction is subject to regulatory and other approvals.
As for CTG, HPE announced last week that it was selling the group’s assets to global technology company HCLTech. HPE will retain its Telecom Solutions Group, a division of CTG that provides operational support systems (OSS), which will remain within HPE Aruba Networking.
“For IT, these changes could mean potential shifts in vendor relationships and service dynamics,” said Scott Bickley, advisory practice leader at Info-Tech Research Group. “Organizations using HPE’s CTG services should review existing contracts and SLAs to ensure continuity as HCLTech prepares for the transition as it integrates these assets. These are the types of changes that IT must actively manage to ensure continuity of services, take advantage of new capabilities, and mitigate risk.”
Myers explained that the asset sale reflects the company’s current focus. “HPE has been transforming communications solutions into a software-centric growth business in recent years,” he said. “CTG is a strong, profitable business driven by talented team members, while we see its model of creating and integrating custom solutions and products as a strong strategic fit with HCLTech.”
Mayer said the transaction is expected to close within six to nine months, subject to regulatory approvals and other conditions, adding that “we expect to engage in discussions with HCL Tech in the meantime to expand our strategic partnership.”
In addition to divestitures in key areas, the company has made a number of acquisitions to further its growth strategy. Myers highlighted three in his blog: Athonet (private 5G), OpsRamp (IT operations) and Axis Security. The Juniper Networks acquisition, expected to close in late 2024 or early 2025 subject to Juniper shareholder and regulatory approval, “will create a new networking leader with a comprehensive portfolio, providing our customers and partners with compelling new options to drive business value,” Myers said.
