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IBM-Lenovo computer server business deal receives clearance from US regulator

Out-Law News | 18 Aug 2014 | 12:18 pm | 1 min. read

A US regulator has approved Chinese computing giant Lenovo's proposed takeover of a server business run by IBM.

The two companies confirmed that the $2.3 billion deal, for the sale of the X86-based server business by IBM to Lenovo, received clearance from the Committee on Foreign Investment in the United States (CFIUS) late last week. China's Ministry of Commerce approved the deal earlier this summer, Reuters reported at the time.

"The clearance by CFIUS of this transaction is good news for both IBM and Lenovo, and for our customers and employees," IBM said in a statement. "The parties now look forward to closing the transaction. The approval of the $2.3 billion sale to Lenovo enables IBM to focus on system and software innovations that bring new kinds of value to IBM clients in areas such as cognitive computing, big data and cloud, and provides clarity and confidence to current x86 customers that they will have a strong partner going forward."

CFIUS is a body that is empowered by US law to scrutinise proposed business transactions that could result in US businesses being controlled by foreign companies. It reviews how the proposed deals would impact on US national security.

Lenovo is a Chinese company and, in addition to its proposed deal with IBM, is also seeking approval for a reported $2.91 billion takeover of Motorola Mobility, the mobile device manufacturer which is currently owned by Google.

Lenovo said: "As we have stated consistently for both the x86 and Motorola Mobility acquisitions, we continue to work through a number of regulatory and business processes to ensure an effective and timely closure on both deals. We remain on track to close both deals by the end of the year."