US government clears China for big deal with IBM

March 9, 2005      (Page 2 of 4)

The new Lenovo, as executives refer to it, aims to combine its own business in China with IBM's in the rest of the world, creating a PC giant that can compete globally with Dell and Hewlett-Packard. The $1.75 billion deal with IBM would make it the world's third-largest PC maker. It also aims to bring Lenovo PCs, now available only in China, to the rest of the world.

The agreement was quickly approved by the U.S Federal Trade Commission. But in January, the CFIUS--which is made up of 11 government agencies, including the departments of Justice and the Treasury--decided to conduct an extended review.

Although the proceedings are kept secret, government officials essentially wanted to speak to Lenovo executives and hear more about the company's plans, Ward said.

Earlier this year, some urged the CFIUS to take a harder look. Three high-ranking members of the House of Representatives, for example, wrote a letter to the committee, urging it to conduct a full investigation of the proposed sale.

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