Security fears raised in the United States by the sale of IBM's computer business to the mainland's Lenovo Group are inevitable but unlikely to scupper the deal, industry watchers say.
The immediate future of the US$1.75 billion sale rested with an 'obscure [but] extremely significant body', said Robert Woll, a managing partner of law firm Morrison & Foerster. 'But while not inconceivable, it would be somewhat surprising if the deal is blocked.'
Citing anonymous sources, Bloomberg yesterday said the Committee on Foreign Investments in the United States (CFIUS), whose approval was required for the deal to proceed, feared mainland agents could engage in industrial espionage from IBM's facility in North Carolina.
The committee is expected to give its approval by Saturday or launch a 45-day investigation that would in turn be subject to a review by President George W. Bush.
Mr Woll said the volume of proprietary technology owned by IBM was likely to be the main reason for the committee looking closely at the sale. The US limits exports of advanced technology to the mainland over worries that they could be used by the military.
'IBM is the largest patent-holder in the world, so the question of technology transfer and licences to Lenovo may have triggered a threshold beyond which CFIUS will want to investigate further,' Mr Woll said.
Analysts said the deal was bound to raise national security concerns, particularly among the so-called blue team in Washington, which opposes closer ties with the mainland. Last month, the Centre for Security Policy, a right-wing think-tank, claimed the mainland's ambitions included 'neutralising US dominance in space and information technology - Chinese acquisition of IBM's personal computer division is not an accident'.
