Monday, July 26, 2021

Lenovo Is Considering Buying RIM

The CFO of China-based Lenovo said the company is considering purchasing Canada-based RIM. However, any deal would face significant hurdles—including approval from the Canadian government—before it could be finalized.

Bloomberg BusinessWeek reported, “Lenovo Group Ltd. (992) is assessing potential acquisition targets and strategic alliances, including a deal with BlackBerry maker Research In Motion Ltd. (RIMM), as the second-largest producer of personal computers tries to bolster its mobile-device business. ‘We are looking at all opportunities — RIM and many others,’ Chief Financial Officer Wong Wai Ming said yesterday in an interview at the World Economic Forum’s meeting in Davos, Switzerland. ‘We’ll have no hesitation if the right opportunity comes along that could benefit us and shareholders.'”

TGDaily’s Emma Woollacott noted, “Whether or not RIM is ‘the right opportunity’ will depend heavily on the reception it gets for its new BlackBerry 10 operating system next week. It’s also promising two new handsets shortly after the launch, with several others to follow during the year. If the OS goes down well, though, it will boost the company’s share price, which has recently started to recover.”

Euan Rocha with Reuters cautioned, “But Levovo, which vaulted into the personal computer market with its 2005 purchase of IBM’s PC division, would face formidable hurdles if it tried to buy a company that Canadian Prime Minister Stephen Harper once described as a national ‘crown jewel.’ The Chinese company would also encounter tough regulatory scrutiny in Washington, cybersecurity experts say.”

BGR’s Harshita Rastogi added, “RIM CEO Thorsten Heins recently stated that he will consider selling off the hardware division after he conducts a review once BlackBerry 10 based smartphones have hit the market. With a concern that the PC segment might lose a relative number of market shares to the mobile segment in times to come, Lenovo feels the need to grow its mobile business and hence is looking for an appropriate acquisition and partnership.”

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