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Lenovo's interest in BlackBerry was opposed by Canadian government: Report

Lenovo's interest in BlackBerry was opposed by Canadian government: Report

By Anupam Saxena | Updated: 6 November 2013 11:25 IST

In line with previous rumours, it looks like Chinese device maker, Lenovo, intended to participate in the bidding process for the acquisition of BlackBerry, but was stopped by the Canadian government.

The Canadian government told BlackBerry that it would not allow a Chinese company to acquire BlackBerry because of national security concerns, according to a report by Canadian publication The Globe And Mail, which cited people familiar with the situation as the source for the information.

The sources said that the Canadian government had made it clear during the last one or two months that 'it would not approve a Chinese company buying a company deeply tied into Canada's telecom infrastructure.' However, the government did not receive a formal proposal from BlackBerry about Lenovo actually expressing an interest in acquiring BlackBerry.

The report even anonymously quotes a Canadian government official who acknowledged that Canada was open to foreign investment and even investment from China 'but not at the cost of compromising national security.'

Although Lenovo was interested in buying BlackBerry, the deal could have been under the security scanner for months, even leading to it breaking down, as per the publication's sources.

BlackBerry is known for secure encrypted email and messaging network that has been deployed across enterprises and government agencies. So, the government's worries stem from concern over a Chinese company owning the network and services.

Chinese computer maker Lenovo had even signed a non-disclosure deal to examine BlackBerry's books, however, regulatory obstacles were quoted as a reason for pursuing just parts of the company for acquisition.

BlackBerry announced in September that Fairfax Financial Holdings had signed a letter of intent that contemplated buying BlackBerry for $9 a share, or $4.7 billion, and taking it private. Fairfax had said that it wouldn't increase its 10 percent stake and the company went about trying to attract other investors.

However, BlackBerry abandoned its sale process on Monday, and replaced CEO Thorsten Heins with interim CEO John Chen who was also appointed the Chairman of the company's board.

The new chairman and interim chief executive says he wants to emphasise software and services and not devices. However, Chen also clarified that BlackBerry had no plans to shut down its loss-making handset business.

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