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US likely to approve Motorola sale

by on31 January 2014

Lenovo through on the nod

US regulators are likely to approve Google’s sale of its Motorola Mobility assets to the Chinese PC maker Lenovo. There had been some concerns that the US anti-trust watchdogs might not be happy about the sale, particularly to a Chinese company.

However now seems that Lenovo has advantages over other Chinese companies that should help it overcome the mutual suspicion between the United States and China over industrial spying and cybersecurity, such as its track record of successful U.S. acquisitions in the past. Lenovo said on Wednesday it would acquire Motorola Mobility, along with some 2,000 patents, for $2.91 billion. That news came days after an announcement the company would purchase IBM's low-end server unit for $2.3 billion.

The deals have to be reviewed by the inter-agency Committee on Foreign Investment in the United States, or CFIUS, to ensure they do not threaten national security. Lenovo has been through the CFIUS process three times before and has won approval each time. The first was in 2005, when Lenovo bought IBM's ThinkPad business in a deal that catapulted the company into the global technology big leagues.

Lenovo also went through CFIUS reviews when it bought Stoneware to expand cloud solutions and formed a strategic partnership with EMC Corporation. Both deals were announced in 2012. Lenovo might be required to have a security officer, a security plan or other steps aimed at preventing a foreign government from influencing a company in a way that would put US. security at risk.

The US might also require that only U.S. citizens handle certain products and services or demand that certain products be located only in the United States.

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