Lenovo buy gets green light from Washington

China's Lenovo Group now has clearance from the U.S. government for its big PC deal with IBM.

The Committee on Foreign Investments in the United States, a multiagency panel that evaluates acquisitions of American companies by foreign entities, unanimously approved Lenovo's plan to buy IBM's Personal Computing Division. It had been conducting a review of the deal's potential impact on national security.

IBM, which announced the agreement to sell its PC business to Lenovo in December, plans to take an 18.9 percent stake in the postdeal Lenovo, which plans to reincorporate in the United States. The deal is expected to close on time during the second quarter, IBM said Wednesday.

Stephen Ward, IBM

"We were able to get unanimous agreement from the members of the committee," Stephen Ward, general manager of IBM's Personal Systems Division, said in a telephone interview with Reuters. Ward will become chief executive of the combined company.

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.

Scrutiny from Capitol Hill
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.

"We had an opportunity to meet with leaders in virtually every executive part of the government--senators, congresspeople--they really, really listened to the strategy of the company," Ward told CNET News.com. "It's just a matter of this was the first big