Shareholders of Lenovo Group Ltd yesterday approved its purchase of IBM's personal-computer division -- a deal that would make the Chinese company the world's third-largest PC maker.
The companies planned to complete the US$1.75 billion deal in the second quarter, but it still faces other hurdles -- including a possible challenge by US regulators.
Shareholders approved the purchase -- one of the biggest foreign acquisitions ever by a Chinese company -- at an extraordinary general meeting.
Lenovo, Asia's biggest computer maker, is paying US$1.25 billion in cash and stock for its majority stake in the merged desktop and laptop business, while assuming US$500 million worth of debt and liabilities. Close to 57 percent of Beijing-based Lenovo's equity is held by Legend Holdings Ltd, controlled by the Chinese government.
This worries some American lawmakers, who on Wednesday urged a US government panel to investigate the national security implications of Lenovo's deal with International Business Machines Corp. The Congressmen contend that the companies' agreement might result in the Chinese government being involved in computer contracts with the US government.
The lawmakers wanted the review to be done by the US Committee on Foreign Investment, which considers security risks of foreign companies buying or investing in American businesses.
During Thursday's meeting, Lenovo's management tactfully dodged concerns raised in the US, saying the company hasn't been informed nor has it received any indications that the deal may be blocked.