3Com Farms Out Modem Business to New JV

SINGAPORE (03/22/2000) - As part of a major overhaul of its business, 3Com Corp. will move its V.90 analog desktop and PC Card modem business to a new joint venture (JV) formed with Singapore manufacturer NatSteel Electronics Ltd.

(NEL) and Taiwan's Accton Technology Corp., the companies announced yesterday.

The three partners will form a new company that will be responsible for the design, marketing and sales of Internet access products. These products include the established brands of U.S. Robotics. The companies did not say whether they will continue to use those brands. The new company will be headquartered in the Chicago area where 3Com currently has facilities, 3Com said in a statement.

NEL will also acquire 3Com's manufacturing operations in Mount Prospect, Illinois, for between US$130 million and $160 million, NEL said in a statement to the Singapore Exchange yesterday. NEL said it will retain all of 3Com's 1,200 employees at the plant. The acquired 690,000-square-foot 3Com facility will manufacture all products designed by the JV, NEL said.

This strategic alliance is part of 3Com's new business strategy [See "3Com to Exit Enterprise Nets", Mar. 21], in which 3Com will focus on three distinct markets: consumer, commercial -- particularly small and medium-sized locations -- and service providers.

The new JV company will have its own board of directors, including members from the parent companies, 3Com, Accton and NEL. It is expected that the new company will be operational and independent in May 2000, with the intention to offer an IPO (initial public offering) in the future, 3Com said.

NEL is one of Singapore's largest high-tech manufacturing companies, with manufacturing operations in Singapore, Thailand, Malaysia, Indonesia, China, Mexico and Hungary. Accton is a well-known designer and manufacturer of networking products under its own brand name as well as on an OEM basis.

3Com can be found online at http://www.3com.com/. NEL can be found online at http://www.nel.com.sg/. Accton can be found online at http://www.accton.com.tw/.

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