BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) CEO John Chen said he would not be able to accept a takeover proposal from a Chinese company because Western governments that have deployed BlackBerry phones would not allow it. Chen made these comments during an interview taped July 23 that will air tonight on Bloomberg TV’s Studio 1.0 in reply to a question whether he would sell BlackBerry to a Chinese company.
Regulatory concerns may prove hurdle
Chen said the company cannot make it happen. He added that one of BlackBerry’s biggest customers is government “in the so-called Five Eyes countries where governments share Intelligence.” He also said there will be a lot of regulatory issues and concerns.
Under the Five Eyes agreement, the United States, Canada, Great Britain, New Zealand and Australia have entered into a cooperation. The Canadian smartphone maker has focused primarily on security features in its smartphones to lure corporations and governments. Some high profile customers of BlackBerry are President Barack Obama, German Chancellor Angela Merkel and British Prime Minister David Cameron.
No takeover proposal for BlackBerry
John Chen said at present, he does not have any takeover proposal for the $5.8 billion company. He said simply talking does not qualify as an offer, and he would prefer to build a lot of value before thinking about selling the company.
Lenovo showed interest about a potential deal with BlackBerry last year before the Canadian firm tried and failed to sell itself. It is interesting to note that BlackBerry shares surged 8.5% on Oct. 20, which is the highest since June following the news in which an unnamed source suggested that Beijing-based Lenovo Group Ltd. could propose to acquire the company.
Chen did say he is interested in partnerships with Chinese companies to expand BlackBerry’s presence in the world’s largest smartphone market. Chen expressed his interest during the Asia-Pacific Economic Cooperation CEO summit in Beijing last month where he met the heads of Lenovo and Xiaomi Corp.
Chen a “turnaround CEO”
During an interview with Bloomberg, Chen justified his decision to shake off his retirement and rescue struggling smartphone giant BlackBerry. He said during an interview with Emily Chang of Bloomberg that he is not “crazy.”
Chen did not have the privilege of luxurious living when he was a child. His family lived in a one bedroom apartment and stacked a couple of suitcases together to make a dining room table. Three decades later, Chen is the CEO of BlackBerry and successfully taking ahead his strategy of turning around the company, underscoring his title of “turnaround CEO.”