Chinese telecom equipment maker Huawei has dropped its acquisition plan of US server firm 3Leaf.
The US government had blocked similar deals by the equipment maker on security concerns. Huawei had bought 3Leaf in May 2010 for $2 million (£1.3 million), but immediately did not disclose the deal.
The Committee of Foreign Investment in the United States -Also known as CFIUS, had recommended that the deal should not go ahead. The CFIUS – made up of commerce department, government security and lawmakers had objected to the deal because of Huawei’s supposed link with the Chinese government and the Taliban.
“This was a difficult decision, however we have decided to accept the recommendation of CFIUS to withdraw our application to acquire specific assets of 3Leaf”, Huawei said.
“Huawei will remain committed to long-term investment in the United States. The significant impact and attention that this transaction has caused were not what we intended. Rather, our intention was to go through all the procedures to reveal the truth about Huawei”, it added.
Huawei’s equipment is already used by British Telecom. It has reportedly bid for installing mobile phone network for the London underground rail network in time for the 2012 Olympic.