IBM workers strike in China over terms of Lenovo takeover

Tom Mitchell and Charles Clover

More than 1,000 workers have gone on strike at an IBM factory in southern China, in objection to the terms of their transfer to Lenovo as part of its $2.3 billion acquisition of the US technology giant's x86 server business.

Chinese workers are challenging multi-billion dollar deals involving their employers with increasing frequency, injecting a new element of risk into large cross-border mergers and acquisitions.

(Read more: World's biggest PC maker posts 30% profit jump)

Last year, employees at a Cooper Tire factory in eastern Shandong province seized their plant, ejected managers and withheld financial information when the Ohio-based company agreed to be bought out by Apollo Tyres of India. The industrial action helped wreck what would have been the largest Indian acquisition of a US company.

Adam Jeffery | CNBC

One worker, who asked not to be identified, said that protests began on Monday and production remained suspended at the IBM manufacturing facility in Shenzhen, the industrial center bordering Hong Kong. The factory will be taken over by Lenovo as part of the Chinese company's planned purchase of IBM's low-end server business, announced in January.

The worker added that the factory's more than 1,000 employees were acting independently of the government-sanctioned All China Federation of Trade Unions. "The [official] union has never done anything to help protect our rights," the worker said. "We don't trust it or the [government] labour bureau." Independent unions are banned in China.

(Read more: Google selling Motorola phone business to Lenovo)

"Employees currently involved in x86 operations in Shenzhen have a personal choice of going to Lenovo under terms and conditions comparable … to what they currently are receiving, or they can voluntarily choose what we believe is an equitable severance package," IBM said. "While it is entirely an individual's choice, we are hoping employees will decide to go to Lenovo."

The Chinese computer company said it was aware of the industrial action but declined to comment further, noting that IBM was handling negotiations with the workers. The x86 transaction is expected to close later this year.

Concerns over Lenovo & Google deal

According to a blog post, which showed pictures of IBM workers massed outside the factory, employees had been offered redundancy terms that included an Rmb6,000 ($980) lump-sum payment if they signed by March 7.

The factory's workers are demanding higher payments both for workers who agree to transfer to Lenovo and for those who decide to leave.

Pictures posted online also showed Shenzhen police vans and labor department vehicles parked nearby the factory, although no arrests have been reported.

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In two separate cases in southern Guangdong province, more than a dozen workers are being prosecuted for "public order" offences after they participated in labor protests at a furniture factory and a hospital.

Activists fear the cases signal that a crackdown on legal activists launched last year is being extended to labor organizers as well.

Shenzhen authorities could not be reached for comment on Thursday.