Lenovo Wants To Buy BlackBerry – Report

Blackberry jam spillage stain © Shutterstock

Lenovo reportedly wants BlackBerry to help expand its smartphone reach, but its bid could crumble if the US and Canadian governments object

Lenovo is actively considering a takeover bid for BlackBerry, according to the Wall Street Journal, although any proposal is likely to attract the attention of the US and Canadian authorities.

The Chinese manufacturer has long been linked with a move for struggling BlackBerry, which has already agreed a preliminary deal with Fairfax Holdings, but is still seeking other suitors while the hedge fund completes its due diligence.

Any takeover by Lenovo would be one of the most notable takeovers of a western firm by a Chinese company, and would allow it to expand its smartphone reach. Lenovo currently has a global market share of 4.7 percent, according to Gartner, but the majority of sales are in its homeland.

Lenovo Blackberry bid

BlackBerry Z30 Front SquareHowever given recent concerns from the US about using equipment made by Chinese makers Huawei and ZTE, any such deal is likely to face scrutiny. The US Department of Defense uses 470,000 BlackBerry devices, while they are used by one million US federal and state employees, including President Barack Obama.

However it is worth noting that Lenovo’s 2005 acquisition of IBM’s PC business for $1.25 billion went largely unnoticed even though the US government was a big user of IBM machines. The Canadian government has already said it is taking on a keen interest in proceedings and could potentially veto any deal if it deems it not to be in the economic interest of the country, or if it has security concerns.

In any case, Lenovo is likely to face fierce competition for BlackBerry. In addition to Fairfax, a number of other capital investment firms are considering a bid, while Intel, Google and SAP have all been linked with moves.

Fairfax has until 4 November to complete its review of BlackBerry’s books, and all bids must be submitted before that date. If Blackberry was to renege on its agreement with Fairfax, it would be liable for a breakup fee, although it could be off the hook if its largest shareholder is unable to raise the required funds.

BlackBerry has had a bumpy year! Try our 2013 BlackBerry quiz!