INSTANT VIEW - HP in 1.6 billion pound deal to buy 3Com

NEW YORK (Reuters) - Hewlett-Packard (HPQ.N) plans to acquire network equipment maker 3Com (COMS.O) in a $2.7 billion (1.6 billion pound) deal, banking on the acquisition to improve its position in China.

HP also reported preliminary quarterly profit and revenue that beat analysts' expectations.

COMMENTARY

MARK FABBI, ANALYST, GARTNER

"I definitely think it's a good deal for HP. In my mind, this fills a glaring hole they had in the portfolio, which was for high-end switching. Without that they were locked out of a huge number of deals, hundreds of millions of dollars worth of deals because they weren't even getting considered.

CHARLES KING, ANALYST, PUND-IT INC

"I think we are seeing HP attempting to do with 3Com what they previously attempted to do with the EDS acquisition: They are attempting to buy their way into being more competitive in markets where they have a fairly thin or minimal presence.

"In the case of networking, HP does have some of its own technologies that it has been promoting in place of Cisco technologies and other technologies.

"This demonstrates that HP is very serious about the networking space. The fact that they are willing to put nearly $3 billon dollars where there mouth is suggests that this is not a fly-by-night strategy.