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Lenovo and IBM server deal gets Chinese regulatory approval

BusinessNews
by Darren Allan, 04 Jul 2014News
Lenovo and IBM server deal gets Chinese regulatory approval

Lenovo has obtained Chinese regulatory approval for its deal to buy IBM's x86 server hardware business.

The deal was first announced back in January, and will see the China-based firm fork out a hefty $2.3 billion (£1.35 billion).

And Reuters reports that it now has the Chinese Ministry of Commerce's seal of approval, the body which keeps an eye on monopolies. The acquisition should be completed before 2014 is out, at least according to Lenovo's CEO, Yang Yuanqing.

But while there's now a green light in China, permission is still to be granted by the regulators over in the US. And that's a somewhat thorny area, because as we reported last week, the American government apparently has concerns over security once the acquisition goes through.

IBM server hardware is used across the States, of course, but also in sensitive data centres that for example support the Pentagon – and the maintenance contacts therein are a source of worry in terms of potential access by Chinese spies and hackers. Indeed, IBM has reportedly offered to continue maintenance of servers in the US for an "extended period" following the deal, to help allay fears.

This isn't the first time Lenovo has snapped up a chunk of IBM, with the company buying IBM's PC business back in 2005, a move it has done very well out of – it's now the world-leading PC vendor (taking the crown from HP which held it for some time previously).

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