There has been much speculation about the future of Canadian smartphone maker BlackBerry this year. The once dominant technology firm has fallen off completely, a shell of its former self, leaving many people to wonder if the company would be sold to a competitor, broken into different pieces or become private. Now the public seems to have an answer. BlackBerry has agreed in principal to be acquired by Canadian holding company Fairfax Financial. According to the washingtonpost.com:
“BlackBerry announced Monday that it has agreed to be acquired by Fairfax Financial Holdings Limited, a Toronto-based financial holding company, for $4.7 billion.
“The deal was recommended by a special committee BlackBerry formed last month after disappointing sales of its newest handsets.”
It has been a long road down for BlackBerry, formerly known as Research In Motion. The company failed to innovate in the wake of new devices from Apple and Samsung. They proclaimed this their comeback year with the launch of their BlackBerry 10 devices, but they weren’t well received by consumers who had already moved on.
Although this news sounds great for BlackBerry shareholders, it should be noted that this isn’t a done deal. BlackBerry has agreed to be bought by Fairfax, but the company hasn’t completely committed to the deal. As reported by Bloomberg:
“More notably, though, Fairfax is not agreeing to buy BlackBerry. It’s agreeing to intend to buy BlackBerry, but that’s subject to due diligence by Fairfax and its lenders: They have until Nov. 4 to check out BlackBerry and decide if this is really a good idea.
“For its part, though, BlackBerry really is agreeing to be sold to Fairfax: If the company stops negotiating with Fairfax, or if it enters into another transaction, it will owe Fairfax 30 cents a share, or about $157 million, which is a lot of money for BlackBerry. It really can’t walk away from a sale — not that it’d want to — and getting a higher offer will be that much harder if $157 million of it needs to go to Fairfax.”
The deal is likely a play to keep BlackBerry Canadian, as the government has been vocal about that as a term of any deal. The possibility of BlackBerry being sold to a Canadian holding company is sure to appease them.
This acquisition is still in development, and the story will be updated as more information is released.
