Friday, June 21, 2024

IBM-Lenovo x86 Server Deal Gets U.S. Government OK

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IBM and Lenovo can finally let out a big sigh of relief.

The companies confirmed that they have received approval from the U.S. government on the $2.3 billion sale of IBM’s x86 server unit to Lenovo, a Chinese PC maker. Nine years ago, Lenovo paid $1.25 billion for Big Blue’s PC business, including its legendary line of business-class ThinkPad laptops.

In a brief Aug. 15 statement, IBM said that the IT giant had “received notice from the Committee on Foreign Investment in the United States (CFIUS) of the successful conclusion of the committee’s review of the divestiture of its x86-based server business to Lenovo.” The deal drew tight scrutiny on national security concerns following the possibility of Lenovo-supplied servers with secret Chinese government backdoors operating on U.S. networks.

The companies clearly placated those concerns.

“Lenovo can confirm reports that CFIUS has cleared its transaction to acquire IBM’s x86 server business and the companies have completed the regulatory process in the United States,” said the computer manufacturer in a statement. “As we have stated consistently for both the x86 and Motorola Mobility acquisitions, we continue to work through a number of regulatory and business processes to ensure an effective and timely closure on both deals.”

On Jan. 29, Google announced that it was selling its Motorola Mobility handset unit to Lenovo for $2.91 billion. “This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere,” said Larry Page, CEO.

Likewise, the x86 server deal will help IBM direct its energies toward high-value and emerging IT products and services.

The Committee’s stamp of approval “enables IBM to focus on system and software innovations that bring new kinds of value to IBM clients in areas such as cognitive computing, Big Data and cloud,” stated IBM. It also lifts a cloud of uncertainty by providing “clarity and confidence to current x86 customers that they will have a strong partner going forward.”

On Jan. 23, the companies announced that Lenovo had agreed to buy IBM’s low-end x86 server division. “With the right strategy, great execution, continued innovation and a clear commitment to the x86 industry, we are confident that we can grow this business successfully for the long-term, just as we have done with our worldwide PC business,” said Lenovo CEO Yang Yuanqing at the time.

The Chinese Ministry of Commerce cleared the transaction on July 4. Approximately 7,500 IBM employees worldwide are expected to make the transition to Lenovo.

Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.

Photo courtesy of Shutterstock.

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