Lenovo-IBM Server Deal Gets Regulatory Approval in China

Pulkit Chandna

Now all eyes on the U.S. government

Chinese PC vendor Lenovo’s $2.3 billion acquisition of IBM’s low-end server business has won the approval of Chinese Ministry of Commerce's anti-monopoly bureau , according to news agency Reuters . However, this is only half the battle. Announced in January this year, the deal now requires the approval of regulators in the States — something that could prove a bit tricky against the backdrop of the ongoing U.S.-China cyber standoff.

For the deal to go through, Lenovo will have to convince the Committee on Foreign Investment in the U.S. (CFIUS) that it won’t allow the acquisition (it’s second largest till date) to be used by the Chinese to compromise the security of IBM’s many high-profile clients, which include the likes of the Pentagon and the FBI.

The company, meanwhile, is confident of both this $2.3 billion deal with IBM and the $2.91 billion acquisition of Motorola Mobility going through before the end of 2015.

"I don't think (the cyber-theft case) will impact Lenovo's business," Lenovo CEO Yang Yuanqing recently told Reuters. "For a long time we've operated not just in China but also in the U.S. and other global markets. We have always been a transparent company, a trusted company, we've never had any issue with the government.”

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