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China gives Lenovo IBM server deal the green light

$2.3bn server buyup approved in Asia, now Lenovo waits on the West.

By Ben Sullivan

Lenovo’s proposed deal to buy IBM’s low-end server business for $2.3bn has been approved by the Chinese Ministry of Commerce’s anti-monopoly bureau.

First announced in January, the deal is expected to be complete by the end of 2014. The deal does however still need US regulatory approval.

The US government has continued to be critical of the move with concerns over national and business security. The Pentagon’s computer networks use IBM’s x86 servers, and government officials are concerned about unauthorised remote access by Chinese hackers and spies.

The deal includes IBM’s System x, BladeCentre and Flex System blades and switches, x86-based Flex integrated systems, NeXtScale and iFataPlex servers.

Lenovo CEO Yang Yanqing said at a shareholder meeting: "There is no change to the plan", and that "[IBM] remain on track to close the investment by the end of the year".

Both IBM and Lenovo are seeking an extension to the US national security review of the deal.

Bloomberg cited a source familiar with the matter, who said that both companies resubmitted the transaction for review by the Committee on Foreign Investment in the US (CFIUS).

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The deal comes as US and Chinese tensions rise amidst ongoing spying and hacking accusations.

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