Huawei drops a controversial US takeover bid for 3Leaf

Image caption,
Takeovers are coming in for scrutiny as governments look to keep control of key industries

Huawei, a Chinese telecom equipment maker, has dropped a controversial takeover of US server firm 3Leaf.

Huawei, which has had earlier US deals blocked on security concerns, bought 3Leaf in May 2010 for $2m (£1.2m) but did not immediately disclose the deal.

A subsequent review by the Committee of Foreign Investment in the United States said the deal should not go ahead.

Huawei's takeovers have come under scrutiny amid concerns about its links to the Chinese government.

Huawei had said it would wait for a ruling on the deal from US President Barack Obama.

The Committee of Foreign Investment in the United States, also known as CFIUS, is made up of US governmental security, lawmaking and commerce representatives.

New deals?

Huawei's decision comes as it is being linked to another high profile deal in the UK.

According to newspaper reports, Huawei is bidding for the contract to supply a mobile-phone network that would allow travellers to make calls on the London underground rail network.

The deal would look to have the system up and running in time for the 2012 summer Olympics in London.

Huawei's equipment is already used by British Telecom in the UK.

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