As the list of potential investors who recently considered buying BlackBerry (BBRY) continues to grow, new details are emerging about why one of them—the Beijing tech giant Lenovo (992:HK)—never ended up submitting a formal bid. Turns out Chinese investors are not particularly welcome in Canada.
In recent months, as the Globe & Mail reports, the Canadian government intervened and informed BlackBerry that it would not accept a takeover by any Chinese company due to national security concerns:
“Ottawa made it clear in high-level discussions with BlackBerry that it would not approve a Chinese company buying a company deeply tied into Canada’s telecom infrastructure, sources said. The government made its position known over the last one to two months. Because Ottawa made it clear such a transaction would not fly, it never formally received a proposal from BlackBerry that envisioned Lenovo acquiring a stake, sources said.”
“We’ve heard similar claims about Lenovo’s intentions, and they do make sense,” adds All Things D. “A deal for BlackBerry might have been a good fit for Lenovo, now the world’s fourth-largest smartphone manufacturer. Certainly, it would have given the Chinese company a more globally renowned mobile brand and stronger carrier connections.”
The Canadian government’s discomfort with Lenovo appears to be part of a broader pattern of wariness about foreign investment because of security issues. Not long ago, for instance, the government scuttled an Egyptian investor’s bid to purchase a division of Manitoba Telecom Services.
Yet amid growing outrage around the world about U.S. spying and a troubling new report about how the U.S. government may have gathered surveillance by secretly breaking into Yahoo! (YHOO) and Google (GOOG) data centers, American companies seem for now to have been spared the “not welcome” sign in Canada.
In the meantime, BlackBerry will plow ahead, alone.