Chinese electronics company Lenovo is actively assessing Blackberry as a takeover target, prompting speculation that a potential deal would face significant regulatory challenges.
Hong Kong-listed Lenovo has signed a non-disclosure agreement to look at…
Chinese electronics company Lenovo is actively assessing Blackberry as a takeover target, prompting speculation that a potential deal would face significant regulatory challenges.
Hong Kong-listed Lenovo has signed a non-disclosure agreement to look at the struggling smartphone manufacturer’s books, the Wall Street Journal reported citing unnamed sources.
But a sale is likely to face intense scrutiny from regulators in both Canada and the US, particularly in light of the fact is secure server network handles confidential corporate and government emails.
Canadian law entitles the federal government to veto proposed foreign takeovers if it decides they would not provide a “net benefit” to the country or could threaten national security.
Since announcing in August that it was exploring strategic options including an outright sale, Canada-based Blackberry has been linked with numerous potential buyers.
In September, the smartphone maker agreed to a preliminary US$4.7bn deal with a consortium led by its largest shareholder, Fairfax Financial Holdings. However the terms of the deal entitle Blackberry to negotiate with other bidders.
A few weeks later, co-founders Mike Lazardis and Doug Fregin, who together own 8% of the manufacturer’s stock, revealed they have hired Goldman Sachs and Centerview Partners to advise them on a potential bid for the company.
Cisco Systems, Google and Germany’s SAP are also reported to be in talks with Blackberry to buy all or parts of the company, with the tech firms believed to be particularly interested in its patent portfolio and secure server network.
Lenovo executives had expressed interest in Blackberry previously. At January’s World Economics Forum in Davos, CFO Wong Wai Ming said the company was looking at Blackberry and other potential targets, adding that it would not hesitate if the right opportunity came along.
