Lenovo's purchase of Motorola Mobility should get a green light from US regulators. But the company will have to agree to certain concessions in the name of US national security.
On Wednesday, the Chinese computer maker announced its $2.91 billion purchase of Google's Motorola mobile phone business and around 2,000 related patents. But like any major acquisition, this one has to go through the regulatory ropes before it's a done deal.
The purchase faces a review by the Committee on Foreign Investment in the United States (CFIUS), a federal agency that looks out for potential US national security issues, Reuters reported Friday. As such, Lenovo will likely be asked to set up certain measures to make sure it can't be influenced by the Chinese government in ways that would harm US security, a security expert told Reuters. The CFIUS may also require that certain products be handled only by US citizens or be located only in the United States.
Lenovo's $2.3 billion purchase of IBM's Intel server lineup, announced earlier this month, faces the same scrutiny.
Despite the need for certain concessions, Lenovo does have a distinct advantage, Reuters noted. It's been through this process before.
The company was up against similar roadblocks when it acquired IBM's PC business in 2005. Lenovo also dealt with the CFIUS in 2012 when it purchased US software maker Stoneware and launched a partnership with EMC. Each of those deals won regulatory approval.
"If there was a Chinese company that was well-positioned to see this deal come off, it's Lenovo," Jim Lewis, a security expert with the think tank Center for Strategic and International Studies, told Reuters. "They've done the dance before and they know what the steps are."