Updated Jul. 2, 2014 at 8:36 a.m.

Lenovo's chairman expects IBM server deal to win approval

Published: 2014-07-02 06:27:00
Updated: 2014-07-02 08:36:21

Lenovo is still counting on adding IBM's x86 server business to its growing arsenal of products and services by the end of the year.

"There is no change to the plan," said Lenovo Chairman and CEO Yang Yuanqing about his company's plan to acquire IBM's x86 server businesses for some $2.3 billion.

Yang made his comment at a press conference in Hong Kong on Tuesday, according to The Wall Street Journal. 

The CEO remains confident even as the U.S. government continues to investigate the deal for possible security concerns.

According to website Wall Street Scope, Yang "didn’t make any comment on the security concerns. He just said that he cannot disclose the details of the ongoing discussions with regulators. However, he added that there is no security concerns linked with the deal."

Last week, WRAL TechWire reported that Lenovo was still on track to close on its $5 billion dollars worth of acquisitions from IBM and Google before the end of the year.

The European Union approved the Lenovo-Google Motorola Mobility deal earlier this week.

"We don’t comment on regulatory review processes and we remain on track to close both deals by the end of the year," Ray Gorman, executive director of communications for Lenovo, told WRAL TechWire last week.

Gorman responded to a query following a report from The Wall Street Journal that Lenovo was encountering difficulties in closing the deal with IBM for its x86 server business. 

Recent WRAL TechWire Coverage of IBM-Lenovo Deal:

After months of talking, Lenovo and IBM (NYSE: IBM) remain involved in discussions with the U.S. government as they try to win approval for their $2.3 billion x86 server deal.

The deal "remains in limbo," The Wall Street Journal reported.

The hangup remains concerns about security, the newspaper said."The deal, struck in January, remains in limbo as the U.S. government investigates security issues around IBM's x86 servers, which are used in the nation's communications networks and in data centers that support the Pentagon's computer networks, say people familiar with the matter," according to The Journal.

The Committee on Foreign Investment in the U.S. is "worried" that servers "could be accessed remotely by Chinese spies or hackers" or even "compromised through maintenance," the paper says. 

The Journal cited unnamed sources. 

Lenovo was able to overcome similar concerns in 2005 when it bought IBM's personal computing business, which was largely based in Raleigh.

Much of the x86 business also is based in the Triangle, including its top management.

Earlier this month, Bloomberg reported that IBM and Lenovo had sought an extension of the government review.

In April, Bloomberg reported that the two companies were running into na "perfect storm" as they review process unfolded.





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