Lenovo’s planned acquisition of IBM’s x86 server business for $2.3 billion has cleared a major US regulatory hurdle, paving the way for the deal to close by the end of the year.
The deal has been cleared by the Treasury Department’s Committee on Foreign Investment in the United States (CFIUS), which looks into transactions involving foreign owners that could affect US national security.
In June, The Wall Street Journal reported the deal could be in jeopardy because the US has sometimes viewed Chinese companies with suspicion. In October 2012, US lawmakers advised the private sector not to buy equipment from Huawei or ZTE, saying the gear posed national security risks.
To allay such concerns, Lenovo launched a public relations campaign to prove the deal won’t threaten US national or business interests. In 2005, Lenovo had completed the acquisition of IBM’s PC business for $1.25 billion, a deal also approved by the CFIUS.
With CFIUS clearance, Lenovo and IBM “have completed the regulatory process in the US,” Lenovo spokesman Brion Tingler said in an e-mail.
China’s Ministry of Commerce (MOFCOM) has already approved the deal. The transaction also needs to be approved by the Canadian government, according to Lenovo.
IBM will divest its x86 server assets but retain its Power8 line of microprocessors and servers.
Lenovo is also going through the necessary regulatory steps to clear its $2.91 billion acquisition of Motorola Mobility, which was announced in January.
Lenovo said both transactions are on track to be finished by the end of the year.
IDG News Service
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