The European Union has approved Lenovo's acquisition of Google's Motorola Mobility business. However, just like the IBM x86 server deal with Lenovo, the Motorola merger is still awaiting a go-ahead from the U.S. regulators.
In January this year, Lenovo proposed to acquire Motorola. The smartphone market is growing at a rapid pace and the latest Motorola acquisition will help Lenovo to expand its smartphone business in the U.S. and Western Europe.
"The acquisition of such an iconic brand, innovative product portfolio and incredibly talented global team will immediately make Lenovo a strong global competitor in smartphones. We will immediately have the opportunity to become a strong global player in the fast-growing mobile space," said Yang Yuanqing, chairman and CEO of Lenovo in January this year.
On Friday, June 27, the European Commission issued a statement confirming the approval of the merger between Lenovo and Motorola Mobility.
"The Commission concluded that the proposed acquisition would not raise competition concerns in relation to smart mobile devices (smartphones and tablets), given the limited market position of the parties and the presence of other strong suppliers in the market," per the European Commission statement.
The European Commission suggests that Lenovo has acquired limited patents and Motorola Mobility does not have a big part of the smartphone market share. The acquisition will not affect competitors and the Commission does not think that the merger will not result in the closure of business for any competitor.
In January this year, Lenovo also announced that it wants to acquire IBM's x86 server business. However, the rising political tension between the U.S. and China over cyber spying may be one of the factors that has put the deal on hold.
A recent report suggests that U.S. regulators are concerned over Lenovo's proposal to buy IBM x86 server business as these servers are currently being used in the nation's communications network. The x86 servers are said to be used in data centers that support Pentagon's computer networks. The U.S. government is concerned as they think that if Lenovo, a Chinese company, buys the x86 server business, then these servers may be accessed remotely by Chinese hackers to obtain details of confidential data.
As Lenovo has already received a go-ahead regarding the proposed acquisition of Motorola from the European Commission, the company will hope to get an approval from U.S. regulators sooner than later. However, the IBM and Lenovo deal still remains in the limbo.
