Huawei Technologies Co. Ltd. is the latest major vendor to take a shine to specialist Chinese vendor Beijing Harbour Networks Co. Ltd. , which was formed in November 2000 by former Huawei vice president Yinan Li.

The two companies have signed a Memorandum of Understanding concerning an acquisition by Huawei of many of Harbour's assets, though talks are still proceeding. The China Business News reported a source as saying the deal could close in July and be worth about $212 million.

No further comment was available from Huawei, while Harbour couldn't be reached.

News of Huawei's swoop comes as its broadband access equipment joint venture arrangement with Nortel Networks Ltd. broke down. (See Nortel, Huawei Kill JV.)

Huawei isn't the first company to sit down with Harbour. According to Chinese media reports in December 2005, Siemens Communications Group was on the verge of buying some Harbour assets in a deal valued at $110 million. (See Will Siemens Sail with Harbour?)

But the deal fell through and Siemens went on to buy Shanghai-based SDH equipment firm Photonic Bridges Inc. on May 16 for an unknown sum.

Harbour says it has more than 6,000 core and edge IP routers and more than 5,000 multiservice optical transport switches deployed, more than 5 million Ethernet switching ports in action, and more than 2.6 million IP DSLAM lines deployed. It claims to have recorded revenues of more than $100 million in 2005 and has about 1,500 on staff in 28 Chinese cities.

Huawei is aiming for revenues of about $7.8 billion this year. (See Huawei 2006 Target: $8 Billion.)

— Ray Le Maistre, International News Editor, Light Reading