Lenovo expects to complete IBM, Google deals by year-end

China's Lenovo Group Ltd expects to complete the purchases of IBM Corp's low-end server unit and Google Inc's Motorola Mobility business by year-end, Reuters quoted Lenovo chief executive officer Yang Yuanqing as saying.

The deals are in the process of approval by US and Chinese regulators.

"Both deals are under the approval process in the two countries and they are progressing," Yang said at Lenovo's annual general meeting in Hong Kong.

"We hope to complete the two deals by year-end," he said. "The US government...and US Army are all our clients. There has been no issue and we will keep this tradition."

According to a report in The Wall Street Journal, last week, the $2.3 billion IBM deal was in limbo as the US government investigated national security issues.

US China tensions over cybersecurity issues had escalated after the US Department of Justice charged five Chinese military officials with hacking the systems of US companies and stealing trade secrets in May.

China has denied the claims, and has in turn accused the US of massive cyberspying.

Lenovo, which last year overtook Hewlett-Packard Co as the world's largest PC maker, was trying to obtain regulatory approvals for acquisitions of IBM's x86 low-end server unit ($2.3 billion) and Google Inc's Motorola Mobility ($2.91billion).

At the time when the deals were announced in January, Lenovo said it expected both deals to close by the end of this year.

However, people familiar with the matter told The Wall Street Journal last month that US security officials were looking into risks related to the IBM server deal, over concerns that the servers, used by some parts of the US government, could be accessed remotely by Chinese hackers.

Yang had no comment on whether the US government was raising any security concerns about the IBM server deal. He said he was not in a position to share details of the company's discussions with regulators. However, he rejected the view that Lenovo's products could raise security concerns.

Dow Jones Business News cited people familiar with the matter as saying that the US government had been looking into the possible national-security implications of Lenovo's proposed acquisition, partly due to the use of IBM's x86 servers in US communication networks and in data centres that supported the Pentagon's computer networks.