IBM and Lenovo server deal gets the green light from US authorities

US government clears deal despite security concerns

IBM has announced that the sale of its x86 server business to Lenovo has been given the all-clear by a US government committee scrutinising the acquisition. The two firms are now looking to complete the transaction, IBM said.

The move was announced in January and will see Lenovo acquire IBM's System x server line, along with the associated BladeCenter and Flex System blade servers and switches, x86-based Flex integrated systems, NeXtScale and iDataPlex servers and associated software, blade networking and maintenance operations.

However, questions were soon being raised about the deal because of the fact that IBM servers are widely used in communications networks and in data centres that support US government operations.

The proposed acquisition was referred to the Committee on Foreign Investment in the US (CFIUS), an inter-agency committee within the US government tasked with reviewing takeovers of US firms for potential risks.

The committee raised concerns that the takeover could have led to Lenovo servers being accessed remotely by Chinese spies or compromised through maintenance processes, according to reports in The Wall Street Journal in June, which looked like they would delay the acquisition.

However, IBM has now announced that CFIUS has been satisfied that the deal can go ahead, and has cleared the two firms to proceed.

"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," IBM said in a statement.

In April, IBM launched a website, Transitioning x86 to Lenovo, to provide clients and business partners with key information relating to the takeover. At the time of writing, this had not been updated to reflect the new information.

When the sale was originally announced, IBM and Lenovo said they expected the deal to reach completion before the end of 2014. Lenovo said in a written statement that this was still expected to be the case, both for this and its takeover of Motorola's mobile division.

"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. Out of respect for the confidentiality of the process, we will not have any further comment until we have met all conditions for closure," the statement said.