U.S.-based technology company Hewlett-Packard Co. (HP) is reportedly selling a 51-percent stake of its Chinese data-networking unit, with Tsinghua Holdings, an affiliated firm with the prestigious Tsinghua University, as the prospective buyer.
Tsinghua University is regarded as China's version of the Massachusetts Institute of Technology.
According to people familiar with the plan, Tsinghua Holdings will pay around $2.3 billion for the huge stake of the newly created entity that houses HP's H3C Technologies Co. and its China-based server, technology services and data storage businesses.
Meanwhile, HP will still keep a portfolio of the business, which is considered less politically sensitive.
The Palo Alto, California-based firm will also retain the right to appoint the unit's chairman and chief financial officer.
Recently, HP and other U.S. tech companies have experienced pressure from China after information have surfaced that the U.S. government has gathered sensitive data abroad, sometimes by using facilities belonging to American firms.
The issue has pushed HP to limit its list of bidders for H3C to local companies so as to win the approval of the Chinese government for the data-networking unit's sale.
The new H3C comprises a roster of IT-related products. The entity aims to be one of the leading providers of such hardware in the country, with $3.1 billion worth of annual sales and labor force of about 8,000.
HP became the owner of H3C after it bought the unit from 3Com Corp. for $3 billion in 2010. H3C was launched in 2003 through the joint endeavor of 3Com and China's Huawei Technologies Co.