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Canadian Government Rejected Lenovo Bid for BlackBerry Amid Security Concerns

by Brandon Russell | November 5, 2013November 5, 2013 1:00 pm PDT

BlackBerry Z30-Lockscreen

A new report from The Globe and Mail suggests Lenovo was this close to making a bid for BlackBerry, but the Canadian government shunned the Chinese company amid security concerns. According to sources close to the matter, government officials in Ottawa made it crystal clear it would not approve Lenovo’s offer because executives and Canadian authorities were worried about national security. Specifically, Ottawa didn’t want a Chinese company having access to Canada’s telecom infrastructure. No formal bid was made, but there were murmurs Lenovo was very interested.

On Monday, deadline day for bids, BlackBerry officially announced it was abandoning plans to sell, and instead agreed to a $1 billion financing plan from Fairfax Financial. Considering BlackBerry’s ties to enterprise customers, it was always going to be a logistical nightmare for Lenovo to make an official bid. When news of Lenovo’s interest hit, a report from Reuters cited a Canadian law called the Investment Canada Act, which essentially gives the government the right to deny international companies from buying up companies in Canada if it believes it’s not in the country’s best interest.

One Canadian government official, who chose to remain anonymous, said Canada isn’t anti-China, but won’t settle if it means compromising national security. “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.”

Sources claim Lenovo was willing to go all-out, too, rather than buy bits and pieces. BlackBerry might have been onboard, but the company was worried the bid would have been tied up in regulatory purgatory, and eventually turned down altogether. By that time, the handset maker may not have had time to execute a Plan B, thus the agreement with Fairfax. With continued layoffs, a new CEO and an uncertain future, there’s certainly an ever-darkening cloud looming over Waterloo.

I’m no weatherman, but it sure looks like it’s about to come pouring down unless a miracle happens.

TheGlobeAndMail

Brandon Russell

Brandon Russell enjoys writing about technology and entertainment. When he's not watching Back to the Future, you can find him on a hike or watching...

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