Hewlett Packard Enterprise (HPE) sold its remaining stake in Chinese IT infrastructure and solutions provider H3C Technologies.

As reported by CRN, a filing with the U.S. Securities and Exchange Commission (SEC) revealed the vendor completed the sale of its 13.8% stake to a seven-party buyer group for approximately $986.8 million. In addition, HPE expects to sell its remaining 5.2% stake to Unisplendour International Technology Limited (UNIS) for a further $370.4 million.

The buyer group was led by UNIS and involved investment vehicles linked to China Cinda, CITIC Financial Asset Management, China Merchants Capital, and China Great Wall Asset Management.

Together, the two transactions would generate approximately $1.36 billion for HPE, freeing up capital for the firm’s global operations.

A potted history of HPE and H3C

Headquartered in Beijing, H3C is a major supplier of HPE-related servers, storage, networking, and services for the Chinese market. It originated in 2003 as a joint venture between Huawei and 3Com, focused on enterprise networking products for China and international markets.

In 2007, 3Com bought out Huawei’s stake in H3C, making H3C part of the U.S. Ethernet trailblazer's business. Three years later, HP acquired 3Com for $2.7 billion, subsuming into HP's ProCurve networking division.

Before the HPE spin out of 2015, HP sold majority control that year to Tsinghua Holdings subsidiary Unisplendour. Under that agreement, Unisplendour bought a 51% stake in a new business called New H3C, made up of H3C Technologies plus HP’s China-based server, storage, and technology services businesses. The deal valued the business at $4.5 billion.

When the transaction closed in 2016, Unisplendour held 51%, while the newly minted HPE retained 49%. HPE would agree to sell 49% of its stake in 2023 for $3.5 billion, while Unisplendour eventually acquired a 30% equity stake in H3C after increasing its holding to 81%.

This week's divestment does not mark an HPE exit from China, with the firm moving toward a broader partner-led model in the nation.

At the time of that announcement, Michael Zhu, vice president and managing director of HPE China said the H3C partnership had been a cornerstone of HPE's success in China, adding the partner ecosystem expansion would enhance its ability to meet growing demand for HPE’s hybrid cloud, networking and AI solutions in the Chinese market.