China approves Lenovo plans to buy low-end server of IBM [Big News Network (United Arab Emirates)]
(Big News Network (United Arab Emirates) Via Acquire Media NewsEdge)
BEIJING, China - The government in China has approved Lenovo's proposed deal to buy IBM's low-end server for $23 billion, the Chinese multinational tech firm said Thursday, amid US security concerns.
It is now up to US regulators to decide whether they will or won't support the deal that will give the Chinese PC maker control of IBM's x86 servers, blade networking and maintenance operations
The x86 servers are used in nationwide communication networks and Pentagon data centers.
The deal was first announced in January involving the Chinese tech major that has operations in more than 60 countries and sells its products in around 160 countries. It is headquartered in Beijing.
Lenovo Chief Executive Yang Yuanqing said that the deal is expected to be completed by the end of the year. He said that Google's Motorola Mobility biz should also be completed by that time.
Yang said that national security issues shouldn't be a problem with America.
"We hope to complete the two deals by year-end," he said. "The US government...and US Army are all our clients. There has been no issue and we will keep this tradition."
According to zdnet.com, the authorities in the United States, including security officials and members of the Committee on Foreign Investment in the United States (CFIUS) may have a different opinion.
It is learnt that they have raised a red flag over security issues, seeking a thorough consideration of their concerns over the deal involving the Chinese company.
Last month it was reported that US regulators are concerned that national security may be weakened, and "Chinese spies" may be able to access the Pentagon's servers.
The tech website elaborating further said that the issue is of servers, currently belonging to IBM, which support the Pentagon's networks.
Under the terms of the acquisition, Lenovo can take over maintenance of these servers and that may involve compromising some sensitive data leaving it with Chinese spies.
The US and China have accused each other of cyber spying in recent years. The allegations have undermined the confidence of businesses to invest in each other's countries.
Yang, however, said: "If you look at our history, with domestic and overseas clients, there have never been any issues regarding security."
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