Security is a Factor in IBM Lenovo Deal

    January 25, 2005

As reported yesterday, IBM’s recent deal with Lenovo is under review by the Committee on Foreign Investments in the United States (CFIUS).

According to an IBM spokesman, “IBM has filed the required legal notice with the Committee on Foreign Investments.”

The Committee which includes the U.S. Treasury Department is not allowed to comment on details of the review.

An Enterprise Security Today article points out that “If the IBM and Lenovo deal is prohibited, it would not be the first time the government has blocked sales to Chinese firms, citing national security.

One high-profile example occurred in 2003, when Global Crossing was not granted approval to sell its telecommunications network to a Hong Kong-based company.”

“China is a still a Communist nation,” said Laura DiDio an analyst from Yankee Group. “They’re very closed, despite these deals, and they sell stuff to people we consider enemies. So there’s a real fear here, and it’s not unwarranted.”

DiDio believes that the deal may not die but could alter details.

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