Hewlett-Packard (HP) has announced it is to buy network systems maker 3Com in a deal worth $2.7bn (£1.6bn).
The deal is expected to be completed in the first half of 2010, subject to regulatory approval, the California-based personal computer giant said.
It added that the deal will allow the firm to combine servers, storage, networking, management and services.
The firm also reported preliminary quarterly profits that beat analysts' expectations, despite a fall in sales.
"Solid execution drove exceptional performance for HP this quarter, fuelled by significant growth in China," chief executive Mark Hurd said.
Analysts said the acquisition of 3Com would help the company expand further in the rapidly growing Chinese market.
"What HP likes to do is take assets with a good market share in their respective markets, then leverage HP's brand and distribution to really grow the business," said Shannon Cross at Cross Research.
"3Com has about 55% of revenue from China, which is going to expand HP's reach into that country. That's a positive."
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