Lenovo has already secured office space in RTP for some 2,000 IBMers who are expected to be transferred as part of then $2.3 billion deal for Big Blue’s x86 server business. But Bloomberg news reports that the deal faces a “perfect storm of issues” in winning U.S. government approval.

It’s deja vu all all over again for Lenovo, which faced similar scrutiny in 2005 when it bought IBM’s PC business, even though the company has evolved into an international operation with thousands of employees worldwide. Of those, more than 2,000 are based in Morrisville at its global executive headquarters.

Remember when the U.S. State Department was worried about PCs that might be filled with mischievous  Chinese software and sleeping dragons?

Even as a top Lenovo executive talked positively with Computer Reseller News about what the deal means to the world’s top PC manufacturer, the Committee on Foreign Investment in the U.S., or CFIUS, continues to review the deal. IBM and Lenovo announced the sale in January.

In an in-depth story published early Friday, Bloomberg’s David McLaughlin says that concerns about the deal giving “China back-door access to U.S. secrets and infrastructure” must still be addressed.


WRALTechWire coverage of IBM-Lenovo deal:

  • Lenovo reaffirms commitment to hiring IBM x86 workers
  • IBM pays Chinese workers $6,000 to accept transfer to Lenovo
  • Lenovo picks RTP location for server business
  • HP will target IBM-Lenovo “uncertainty”

Citing unnamed sources, Bloomberg says the “wrinkle” in the deal is that IBM servers are used by the Pentagon, the FBI, and big telecommunications providers. 

“It’s kind of the perfect storm of issues,” Anne Salladin, a former Treasury Department official who worked on CFIUS reviews, told Bloomberg. “Any foreign acquirer with this kind of asset purchase is very likely to be something that CFIUS would want to take a look at.”

Lenovo and IBM spokespersons stood by the deal in comments made to Bloomberg.

The story cited unnamed “people familiar with the matter” as its sources for the report about the CFIUS review.

Meanwhile, Lenovo Chief Technology Officer Peter Hortensius told CRN that Lenovo is moving ahead with plans to absorb the “IBMx86 business intact.”

He said that critics such as HP, which are trying to capitalize on FUD (fearm uncertainty and doubt) about the deal are “dreaming.”

Asked by reporter Tom Spring what Lenovo is telling customers and parnters about the deal, Hortensius replied:

“What we tell customers, analysts, consultants and media is, Lenovo is buying IBM’s x86 business intact. We are buying it with the executive team, the development team, sales team, engineers and all the people that drive that business. And we aren’t looking to change that. The team stays the same. This is IBM’s entire x86 portfolio of products. We have stated very publicly that we are committed to continuing IBM’s road map. Nothing is changing or going away.”

That is, unless CIFUS says otherwise.