Lenovo's $2.3bn Acquisition of IBM Server Unit Cleared by US

Lenovo bought IBM's server unit for $2.3bn amid PC downturn.Reuters

International Business Machines (IBM) has said the US authorities have cleared the sale of its server unit to China-based PC maker Lenovo, after reviewing the deal for national security.

"IBM is pleased to announce it has received notice from the Committee on Foreign Investment in the United States (CFIUS) of the successful conclusion of the committee's review of the divestiture of its x86-based server business to Lenovo," the company said in a statement.

"The clearance by CFIUS of this transaction is good news for both IBM and Lenovo, and for our customers and employees. The parties now look forward to closing the transaction."

The company added that the approval of its $2.3bn (£1.4bn, €1.7bn) sale to Lenovo would enable it to focus on system and software innovations in areas such as cognitive computing, Big Data and cloud. In addition, current x86 customers will have better clarity and confidence under Lenovo.

The CFIUS, which checks if the sale of US businesses to foreign companies would affect national security, has been reviewing the deal announced in January.

The Wall Street Journal earlier reported that US security officials were worried that IBM servers could be accessed remotely by Chinese spies or hackers as a result of the deal.

China's Ministry of Commerce approved the sale in July.

Lenovo in 2005 acquired IBM's PC unit, making the Chinese group the largest manufacturer in the sector.

The approval comes as trade and political relations between the US and China have deteriorated over spying concerns, after the US Justice Department charged five Chinese military members with hacking the systems of US companies to allegedly steal trade secrets.

Lenovo is also acquiring Google's Motorola Mobility mobile phone division for $2.9bn. The deal is expected to be completed in the third quarter, subject to regulatory approvals.

"While our top priority now is full participation in the regulatory approvals process, I am confident that from day 1 after closing, these businesses will quickly begin contributing to our performance and develop into pillars for long-term, sustainable growth," Lenovo CEO Yang Yuanqing said about the acquisitions in its latest earnings statement.