Less than 24 hours after BlackBerry announced it was unable to find a buyer during a months-long sales process, reports have surfaced that the Canadian foreign investment policy quashed a potential bid.
Canada’s Globe and Mail newspaper reports that while Chinese tech giant Lenovo was interested in a takeover of the embattled smartphone maker, it failed to launch a formal bid as a result of Canadian government concerns over national security.
“I don’t think anybody should be surprised that we would have concerns like that,” a Canadian government official is quoted as saying.
“We have been pretty consistent that the message is Canada is open to foreign investment and investment from China in particular but not at the cost of compromising national security.”
“I want BlackBerry to do well. I want BlackBerry to grow and to continue to employ Canadians to continue to innovate and be a challenger to the Android and iOS platforms and Windows platforms and to create a good product that’s doing well.”
The news comes after a $US4.7 billion takeover bid from a consortium led by investment guru Prem Watsa collapsed, with major lenders unwilling to fund the bid over concerns about BlackBerry’s long-term viability.
Watsa’s Fairfax Financial Holdings instead loaned the company $US1 billion through convertible debentures, with chief executive Thorsten Heins stepping aside in favour of turnaround expert John Chen.
The failed takeover process has highlighted Canada’s strict foreign investment law, known as the Investment Canada Act, with critics arguing the legislation has discouraged a serious foreign bid for the company.
In August, Canadian Industry Minister James Moore was forced in an interview to defend the law in the face of BlackBerry’s recent troubles.
“Every country has subjectivity in their foreign investment rules, and for good reason. But we are aware there is some anxiety about Canadian rules and we will be addressing it soon. People think there is some uncertainty in the Investment Canada Act rules, and we want to make sure that’s not the case,” Moore said.
“This is a Canadian company with a long track record of stirring up innovation and important changes in the products we all use. They employ a great number of Canadians. It’s been a source of Canadian pride and we hope that they do well.”