A joint statement from the firms said the Committee on Foreign Investment in the United States (CFIUS), an interagency US government panel which can block mergers for national security reasons, had cleared the deal.

CFIUS rarely blocks a business acquisition but an investigation that uncovers objections may force companies to scrap or modify their plans.

A statement from IBM and Lenovo issued both in New York and Beijing said that the CFIUS review "was concluded in advance of the statutory deadline."

Under the deal, Lenovo will produce IBM-branded computers and IBM will have an 18.9 percent ownership share in Lenovo Group, which is China's largest PC maker and also makes other technology products.

"Lenovo is committed to being a great corporate citizen," said Steve Ward, an IBM senior vice president who will serve as chief executive officer of Lenovo.

"The new Lenovo will be an innovative, international PC company, delivering the best PCs in the industry. With the review by the US government complete, IBM and Lenovo are moving quickly to integrate the two companies and expect to finalize the transaction in the second quarter, as planned."

Lenovo, China's largest personal computer maker, will manufacture PCs for the global market with the IBM name under the deal signed last year, getting some clout in competing with sector leaders Dell and Hewlett-Packard.

Lenovo paid some 1.75 billion dollars under the deal, which underscores the move toward lower-priced PCs.

"The completion of this process is an important step forward for Lenovo. We are committed to working with the highest level of integrity in every community," said Yuanqing Yang, the current chief executive officer of Lenovo, who will become chairman of the company when the transaction closes.

"This is a standard that both Lenovo and IBM have held for decades. Now we are moving quickly to deliver the benefits of the new Lenovo to PC customers worldwide. Lenovo is poised to become an exciting new global competitor in the personal computer market."

IBM shares rose 22 cents to 92.35.

Analysts said the deal may be good for IBM, which can extract itself from the low-profit PC business to concentrate on more lucrative software and services.

PCs have fallen sharply in price in recent years, with units that previously cost more than 1,000 dollars now selling for several hundred dollars less.

The review by CFIUS of the IBM-Lenovo deal was based on some concerns that the Chinese group could obtain sensitive technology, possibly "dual-use" -- civilian and military -- technologies that could be used for civilian or military purposes, analysts said.

The CFIUS panel is chaired by the US treasury secretary and includes the heads of the Departments of Homeland Security, State, Defense, and Commerce, the attorney general, the Office of Management and Budget, the US trade representative, and the chairman of the Council of Economic Advisers.

In 2003, a review by the committee forced Hong Kong-based Hutchison Whampoa to withdraw its bid for bankrupt group Global Crossing because of apparent national security concerns.

CFIUS, which operates under strict secrecy, never revealed why it was investigating the deal -- or even that it was investigating. But some analysts speculated that the US administration wanted to obtain information about the Chinese investment.

IBM "already has their computers manufactured by third parties in China," said Nicholas Lardy of the Institute for International Economics.

"Basically Lenovo is buying a marketing organization. They are in the Chinese and Japanese markets and are making an attempt to have a worldwide distribution system."

All rights reserved. copyright 2018 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.