Lenovo And BlackBerry: The Acquisition Canada Stopped


Although 2013 has been a year of growth and milestones for Lenovo, the Chinese hardware giant was met with rejection when it tried to spread its wings to Waterloo, Ontario, in a BlackBerry take-over deal.

BlackBerry's roots in Canadian and United States government agencies have caused more than just investors to be concerned for BlackBerry's future -- it's a matter of national security.

In October, in the midst of BlackBerry's scramble to search for possible buyers, Lenovo signed a non-disclosure agreement in order to further explore possibilities of an acquisition. On Monday, BlackBerry released its intentions to raise $1 billion in funds in convertible debt financing, about a quarter of which will come from investor Fairfax Financial holdings. The Lenovo option, though it had potential to be swift and successful, was derailed by Ottawa government officials.

[Related: BlackBerry: Does John Chen Mean A Software Tack?]

A Globe and Mail report, citing sources familiar with the situation, said Ottawa shut down any opportunity BlackBerry may have had with Lenovo early on due to national security concerns.

Jim Robinson, a founder of Asyncrob, a Fairfax, Va.-based solution provider specializing in telecommunications said he was not surprised by the Canadian government's national security concerns. Robinson confirmed that Asyncrob does partner with Lenovo and recommends the brand without hesitation, but he does not recommend Lenovo to any customer that requires government-grade security.

"It doesn't surprise me at all that the [Canadian government] is concerned," Robinson said. "Lenovo is a Chinese company and its headquarters are in Beijing."

While it may be true Lenovo's headquarters rest in Beijing, the company also has headquarters in Morrisville, N.C. Additionally, the company, which became the No. 1 PC maker in the world this year, also has manufacturing centers around the world including in Mexico, India and Brazil.

In 2004, Lenovo became the world's third largest PC company after acquiring IBM's PC business and continued to promote the ThinkPad and ThinkCentre laptop and desktop lines among enterprises.

It looks as if BlackBerry, however, will not enjoy the same partnership. Instead, the ailing smartphone company will resort to $1 billion in convertible debt financing, about a quarter of which will come from investor Fairfax Financial and a shuffling of executives in hopes to keep the company afloat.

PUBLISHED NOV. 5, 2013