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3Com and U.S. Robotics Sign $6.6 Billion Merger

New company will lead the market in network adapters, desktop and PC modems.

By Paul Heltzel, PCWorld   

The new company, which will retain the name 3Com, will offer end-to-end solutions for remote access, wide area networks, and local area networks.

%dquotFrom 3Com%squots perspective, they pick up a great product in a great market, and USR picks up a hell of a lot of money,%dquot said Brad Baldwin, director of remote access at International Data Corp. %dquotAnd I have to believe that money overshadows a lot of things here. I think very highly of both companies, but I don%squott think much of this merger. USR is on a roll. The timing is crazy.%dquot

The move does seem oddly timed. U.S. Robotics made headlines earlier this week, when it announced the first shipments of its 56-kbps modems. But Lisa Pellgrim, a senior analyst at Dataquest, said consumers shouldn%squott be concerned about future service from USR.

%dquotUSR has been a very good company for consumers,%dquot Pellgrim said. %dquotThere%squots not going to be that much overlap. I don%squott think consumers will be interacting with a very different company.%dquot

Under terms of the agreement, each share of U.S. Robotics stock will be exchanged for 1.75 shares of 3Com stock. The merger, expected to close this summer, affects more than 12,000 employees in 130 countries.

The two organizations will hold a news conference in Boston tomorrow at 8 a.m. Eastern time to present their combined strategy.