Lenovo CEO Says IBM x86 Server Deal Will Close This Year
CEO Yang Yuanging said that despite U.S. security worries, its $2.3 billion proposal to buy IBM's server business will be approved by regulators.Lenovo executives expect its $2.3 billion deal to buy IBM's x86 server business to close by the end of the year despite national security concerns among U.S. regulators that reportedly have slowed the process. At a press conference July 2 in Hong Kong after the company's annual shareholders' meeting, Lenovo CEO Yang Yuanging reportedly said that the PC maker is still on track to complete the IBM deal as well as Lenovo's $2.9 billion acquisition of Motorola Mobility from Google. "There is no change to the plan," Yang said, according to The Wall Street Journal. "We are still confident that we can complete the two transactions by the end of this year. We are making very good progress in obtaining approvals for the deals." Lenovo, which last year surpassed Hewlett-Packard as the world's top PC vendor, started the year by announcing the deals for IBM's low-end server business and mobile handset maker Motorola. The acquisitions will be part of Lenovo's larger strategy to take leadership roles in most areas of computing, with the hope that the deals would give the company the same boost in servers and mobile devices that its acquisition of IBM's PC business in 2005 did.
However, the Lenovo-IBM deal has run into national security concerns over such issues as cyber-espionage and hacking that have become the norm in U.S.-China relations. U.S. lawmakers for several years have expressed national security concerns about such Chinese companies as Huawei Technologies and ZTE; the officials worried that their products could contain backdoors that would allow Chinese officials access to U.S. networks and sensitive data. Those concerns were heightened when the United States recently indicted five Chinese military officials for allegedly hacking into the computer systems of U.S. companies.