June 25 (Reuters) - International Business Machines Corp's
proposed $2.3 billion sale of its low-end server
business to China's Lenovo Group is in limbo as the
U.S. government investigates national security issues, The Wall
Street Journal reported, citing people familiar with the matter.
U.S. security officials and members of the Committee on
Foreign Investment in the United States (CFIUS) are worried that
IBM's x86 servers used in communications networks and in data
centers supporting the Pentagon's networks could be accessed
remotely by Chinese spies or compromised, the newspaper
The long-expected acquisition in January came nearly a
decade after Lenovo bought IBM's money-losing ThinkPad business
for $1.75 billion, which had also faced scrutiny.
Government officials are also uneasy about the potential
sale of servers that may be clustered together to perform like a
powerful computer, the report said.
IBM and Lenovo are trying to address CFIUS concerns about
server maintenance and have said that IBM will provide
maintenance on Lenovo's behalf "for an extended period" after
the sale, the sources told The Wall Street Journal.
IBM and Lenovo have refiled their application for approval
of the deal to buy more time, Bloomberg reported earlier this
Chinese companies faced the most scrutiny over their U.S.
acquisitions in 2012, according to a CFIUS report issued in
(Reporting by Soham Chatterjee; Editing by Leslie Adler)
- Lenovo Group