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Last Updated: Wednesday, 9 March, 2005, 17:37 GMT
Lenovo's IBM bid gets US go-ahead
Lenovo PCs on display in Beijing
Lenovo is China's top PC firm, with more than a quarter of the market
China's Lenovo has won US government approval to buy the personal computer arm of iconic technology firm IBM.

There had been fears that the $1.75bn (909m) deal would be halted because of concerns it would lead to job losses and compromise national security.

It has been given a green light after a review by the powerful Committee on Foreign Investment in the US (CFIUS).

The merger would create the world's third biggest PC maker with annual sales of close to $12bn.

Cloak and dagger?

Press reports last month claimed that the Justice Department, and the Department of Homeland Security had both voiced concerns about the Lenovo purchase.

At the heart of opposition to the deal were fears that IBM's US factories could offer opportunities for industrial espionage.

CFIUS, whose members come from a number of government departments, thought differently and according to IBM gave the move their unanimous backing.

Stephen Ward, the general manager of IBM's personal systems division, said that Lenovo would not have to change the location of its facilities near sensitive research areas.

Starting 11

Mr Ward said that CFIUS did not call for any limits to be put on Lenovo's ability to sell PCs in the US, allowing it to bid for government and military contracts.

"Everything that CFIUS asked of us was perfectly reasonable and the type of things that would be in a business plan," Mr Ward added.

Lenovo was started by 11 scientists on a Beijing campus in 1984 as a distributor of foreign brands - including IBM, and Hewlett Packard.

Lenovo, formerly known as Legend, currently has a 2.2% share of the global PC market, while IBM has 5.5%.

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