Lenovo expects IBM, Motorola deals to wrap up by year end
Lenovo expects the acquisition of both IBM's low-end server business and Google's Motorola Mobility unit to be wrapped up by year-end.
The Chinese firm's CEO Yang Yuanqing said on Wednesday that both deals are undergoing regulatory approval in China and the United States, but are "progressing," according to Reuters.
At Lenovo's annual meeting in Hong Kong, the chief executive said:
We hope to complete the two deals by year-end. The US government [...] and US Army are all our clients. There has been no issue and we will keep this tradition.
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Last week, the Wall Street Journal reported that Lenovo's plans to purchase IBM's server business were potentially facing delays due to security worries. US security officials and members of the Committee on Foreign Investment in the United States (CFIUS) were scrutinizing whether Lenovo's bid to buy IBM's servers — which support Pentagon systems — could eventually prove to be a chink in the armor of national security if Lenovo maintained them. Sources said that "Chinese spies" may be able to use this link to compromise the Pentagon.
While Yang refused to comment on the report, the executive rejected the idea that Lenovo products were a threat to security. "If you look at our history, with domestic and overseas clients, there have never been any issues regarding security," he said.
This is not the first time Lenovo has fought off security-based scrutiny. When Lenovo purchased IBM's PC business in 2005, Lenovo PCs sent to the military were found to host "connections to China" that were unauthorized. This, in turn, led to a number of US governmental bodies declining to use the firm's technology.
The $2.3 billion sale of IBM's x86 server business was announced in January, and the sale of Google's handset business was also revealed in the same month, valued at $2.91 billion.