[Thinkpad] IBM-Lenovo deal gets further U.S. scrutiny

IBM-Lenovo deal gets further U.S. scrutiny
By Carla Mozee, MarketWatch
Last Update: 4:59 PM ET Jan. 29, 2005

SAN FRANCISCO (MarketWatch) - A U.S. regulatory panel will continue
reviewing IBM's planned $1.75 billion sale of its personal computer
division to China's biggest PC maker, Lenovo Group Ltd, to determine if
the deal would pose a threat to national security, according to
published reports Saturday.

A routine 30-day review is scheduled to expire this week, according to
the Washington Post.

But the Committee on Foreign Investments in the United States, a panel
within the Treasury Department, has decided to scrutinize the deal for
an additional 45 days, the Post reported, citing administration and
congressional sources.

The decision by the committee, which weighs security risks of overseas
firms investing or buying U.S. companies, comes after three Republican
House committee chairmen earlier this week asked Treasury Secretary John
Snow for a full investigation by the panel.

IBM and Lenovo, based in Beijing, need the review panel's approval to
proceed with the sale, which was announced in early December.

The transaction is set to close in the second quarter.

Reps. Henry Hyde, of Illinois, head of the International Relations
Committee; Duncan Hunter, California, of the Armed Services Committee,
and Donald Manzullo, Illinois, of the Small Business Committee,
requested a deeper review from Snow.

The chairmen expressed concern that the sale could transfer U.S.
technology and assets to China, and the possibility that the Chinese
government would fulfill or participate in some U.S. government
contracts currently held by IBM.

IBM said Friday it is confident the panel will approve the deal and said
the process is an effective way to protect national-security interests,
according to the Financial Times.

Shares of IBM closed up 91 cents at $92.89 on Friday.

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Received on Sun Jan 30 05:46:15 2005