Huawei Symantec has announced that they will be splitting up. Due to external circumstances the 2 companies; Huawei, a networking company based in Asia and Symantec have decided to end their joint venture. The joint venture was created 4 years ago.
There are definite merits for having a hardware company (Huawei) partner with a software company (Symantec). Synergies between hardware and software companies exist and in most cases provides companies with the ability to have access to new markets. Symantec is well known for their Anti Virus software (Norton) and being part of Huawei Symantec made sense. The other thing to keep in mind is that China is a huge market and having a presence there could be beneficial to “Western” manufacturers.
The main reason for this sudden decision is that Symantec feared the partnership may ensure that they don’t have access to contracts for the US government. The US government have a list of companies suspected of having connections to cyber terrorism (hackers etc) which they don’t want to officially allow to be registered to trade in the US. Symantec fears its alliance with the Chinese company would prevent it from obtaining United States government classified information about cyberthreats.
A few weeks ago the Chinese search engine Baidu asked that they be taken off this list as they want to be seen as multinational. Both Huawei and Symantec feared their partnership may potentially hurt both of their businesses so they began negotiations to end their partnership.
I wonder how many other companies are re-looking their relationships based on this government list. Could this also lead companies to walk away from potential mergers and acquisitions?
