BlackBerry, Lenovo Deal Shut Down By Canadian Gov't: Report

 
 
By Michelle Maisto  |  Posted 2013-11-05 Email Print this article Print
 
 
 
 
 
 
 

Canada's government made clear no Chinese company had a chance of buying security-entrenched BlackBerry, The Globe and Mail reported.

Lenovo very seriously pursued a deal to purchase BlackBerry, but the Canadian government shut down the talks, The Globe and Mail reported Nov. 4, citing sources familiar with the situation.

"Ottawa made it clear in high-level discussions with BlackBerry that it would not approve a Chinese company buying a company deeply tied into Canada's telecom infrastructure," said the report, adding that the government made its position clear over the last month or two.

In January, Lenovo Chief Financial Officer Wong Wai Ming told Bloomberg that Lenovo was always "looking at all opportunities," including BlackBerry and others.

The company soon after back-pedaled from the remark, saying it was taken out of context. But in October, Lenovo was again said to be in talks with BlackBerry and according to Reuters had signed a nondisclosure agreement, giving it access to a look at BlackBerry's books.

"Because Ottawa made it clear such a transaction would not fly, it never formally received a proposal from BlackBerry that envisioned Lenovo acquiring a stake, sources said," the Globe and Mail reported.

"If the Canadian government hadn't nixed Lenovo's BB bid, the U.S. and U.K. governments almost certainly would have later in the process," Ovum chief telecoms analyst Jan Dawson Tweeted Nov. 5.

He Tweeted again two minutes later, "If you think the kinds of people, companies and orgs that use BlackBerries would be comfortable with Chinese ownership you're nuts."

BlackBerry announced in August that it was open to "strategic alternatives," and in September signed a letter of intent with Fairfax Financial Holdings, its largest stakeholder. Fairfax planned to pay $4.7 billion for the company, take it private and clean house behind closed doors.

On Nov. 4, the deadline for due diligence on the deal, BlackBerry announced a new strategy. Fairfax and other unnamed investors were putting up a $1 billion investment in BlackBerry in exchange for the right to purchase a 16 percent share—a deal that effectively valued that company at a $6.25 billion, analyst Jack Gold wrote in a Nov. 4 research note.



 
 
 
 
 
 
 
 
 
 
 
 
 

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