IBM, Lenovo server deal gets final clearance from US regulators

Summary:The Committee on Foreign Investment in the United States approved the $2.3 billion sale of IBM's x86 server business to Chinese PC maker Lenovo.

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IBM received good news from the Committee on Foreign Investment in the United States (CFIUS) on Friday regarding the proposed sale of its x86-based server business to Chinese PC maker Lenovo.

Following a period of intense scrutiny fueled by national security concerns , US regulators have approved the $2.3 billion sale, which gives Lenovo control of IBM's x86 servers, blade networking and maintenance operations.

The deal received approval in China last month.

While IBM says the sale of its low-end server business will allow the company to focus on system and software innovations such as cognitive computing, Big Data and cloud infrastructure, security concerns have hovered over the deal since it was first announced back in January.

The main issue revolves around the sensitive deployments of the x86 servers – they are not only used in the nation's communications networks, but also within the data centers that run the Pentagon's computer network.

Lenovo will now maintain those deployments, as per the terms of the deal, which critics say could lead to weakened security via hackers or Chinese spies.

But obviously US regulators found the threat to be minimal, and IBM and Lenovo said in a press release that they "look forward closing the transaction."

Topics: IBM, Security, Servers

About

Natalie Gagliordi is a staff writer for CBS Interactive based in Louisville, Kentucky, covering business technology for ZDNet. She previously worked as the editor of Kiosk Marketplace, an online B2B trade publication that focused on interactive self-service technology, while also contributing to additional websites that covered retail tec... Full Bio

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