[Updated with BlackBerry denial] BlackBerry could possibly be the target of an acquisition, with a report claiming Samsung may be looking to buy the Canadian smartphone producer for a hefty sum. Details from a source, along with documents, were allegedly provided
to Reuters, suggesting Samsung may be willing to pay as much as $7.5 billion to take control of the company.
The alleged acquisition would involve Samsung shelling out between $13.35 and $15.49 per share in the company, at a premium of 38 percent to 60 percent on top of the current BlackBerry share price. Executives from each company apparently met last week over the transaction, though representatives for BlackBerry declined to comment about the potential acquisition and the meeting.
While the purchase of the manufacturer would gain it the brand and a manufacturing business, there are two main areas that are likely to be Samsung's reason for the purchase. BlackBerry's patent portfolio would give Samsung a considerable advantage in protecting itself against infringement lawsuits, as well as giving it ammo for its own potential courtroom activities. The entire BlackBerry Messenger system and associated enterprise services would also be valuable to Samsung, allowing it to further bolster its own
Knox service.
BlackBerry CEO John Chen
The purchase could certainly be a way out for BlackBerry, which is still fighting to correct its financial status under the command of CEO John Chen, though there are quite a few obstacles in the way. For a start, Samsung would have to appease Fairfax Financial Holdings, a major BlackBerry
shareholder that helped pay for debt recapitalization before Chen joined the company.
It would also have to face potential opposition from the Canadian government, a problem
Lenovo ran into in 2013. At the time, the government claimed it "would not approve a Chinese company buying a company deeply tied into Canada's telecom infrastructure," under the guise of national security. It is probable that the government would be similarly defensive about BlackBerry, and is likely to be the biggest challenge Samsung will face if it does attempt an acquisition.
[Update] BlackBerry has denied the report, saying "BlackBerry is aware of certain press reports published today with respect to a possible offer by Samsung to purchase BlackBerry. BlackBerry has not engaged in discussions with Samsung with respect to any possible offer to purchase BlackBerry. BlackBerry's policy is not to comment on rumors or speculation, and accordingly it does not intend to comment further."
Shares in the company consequently
reversed course in after-hours trading, though the wording of the denial is such that it leaves the door open to other partnership talks or investment in the company short of outright purchase. Stock in the troubled Canadian firm soared 30 percent on the report, and have lost nearly half that gain thus far in after-hours trading
Top