Blackberry would face federal review if involved in foreign takeover

by Andrew Roach on October 9, 2013

It seems inevitable that Blackberry is going to be taken over at some point in the near future with Fairfax Financial having already made a bid for the company in the last few weeks.

However, with the news that foreign companies are evaluating a possible bid for the struggling smartphone manufacturer, the government has come out stating that they would need to review any bids involving an overseas investor.

It’s a process that Industry Canada undertakes for any takeover bid that is based overseas and is often to ensure that the bid will not affect national security in the long run.

So far, the only foreign company that has a formal interest in Blackberry is New York based investment firm Cerberus
however other foreign giants such as Chinese electronics manufacturer Lenovo are also rumoured to be interested in making a bid.

However, any company interested in Blackberry would need to be assessed by a federal review board as they look to ensure a competitive environment for the entire Canadian technology industry.

In a recent interview, Treasury Board president Tony Clement re-iterated what steps Blackberry would need to go
through to make sure that the bid was ultimately approved. At a trade conference, Clement stated: “What we want is a
stable environment. I think we’ll let the marketplace respond. We have a role to play obviously, which involves national security, and making sure that what occurs is in the public interest.”

There has been limited interest in Canada itself to make a bid for Blackberry as the company’s mounting debts are proving to be a major problem in attracting investment inside the country.

Canada based Fairfax Financial have made a $4.7bn bid for the company and is still considered the favourite to take
over the company considering the previous ties that both the company and its owner Prem Watsa have to Blackberry itself.

This is still probably the safest option and Blackberry will be all too aware of the problems that other companies have had getting foreign bids approved by the government. It was only a few days ago that the government rejected a sale involving Egyptian firm Accelero Holdings and MTS over fears surrounding national security.

Blackberry will know what is stake with the company on the market and the Fairfax bid is certainly going to be a leading contender during the bidding process but the added hurdle of getting the bid approved by the government could be a deterrent that prevents foreign companies from bidding for the smartphone manufacturer.

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