With falling PCs, Lenovo studies buy BlackBerry - The Wall Street Journal Americas

By Dana Mattioli, Dana Cimilluca and Liz Hoffman

Lenovo Group Ltd.

studies make an offer for all the BlackBerry Ltd., the Canadian maker of smartphones in trouble, according to people familiar with the matter, in the latest sign of the voracious appetite of international acquisitions by Chinese companies.

Chinese manufacturer of personal computers and smartphones has signed a “confidentiality” that allows you to analyze the financial data of the BlackBerry, said one of the people.

Spokesmen for BlackBerry and Lenovo, which is the largest PC manufacturer in the world, declined to comment.

BlackBerry

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Once finalized, the agreement between Lenovo and BlackBerry would be among the largest and most notable acquisitions of a Western firm by a Chinese and highlight, once again, the desire of companies the second largest economy in the world to become players weight in the West, where they can acquire industry knowledge and more products to sell to their customers.

Last month, the Shuanghui International Holdings Ltd. completed the purchase of American fridge Smithfield Foods Inc. for $ 4.7 billion, the largest acquisition of a U.S. company by a Chinese.

But if Lenovo

go ahead with a bid to buy a BlackBerry, something still quite uncertain, it certainly face analyzes the governments of Canada and the USA. Offers for BlackBerry must be submitted by November 4, according to a person familiar with the sale process.

BlackBerry is the provider of 470,000 of the 600,000 smartphones used by the Department of Defense, according to a spokesman for the Pentagon. Altogether, more than 1 million BlackBerry devices were used by employees of the federal and state governments of the United States until the end of 2012, according to the company. President Barack Obama has been seen with a BlackBerry, but the White House has not confirmed if he continues using the device.

A spokesman for the Committee of Foreign Investment in the U.S., which probably revise a purchase of BlackBerry Lenovo, declined to comment. A spokesman for the Canadian Industry Minister James Moore – responsible for approving any offer led by a foreign company which may arise for BlackBerry – said the government is aware that the smartphone maker is exploring a sale, but refused to comment on the process or “speculation” about possible buyers.

At the same time, Lenovo is well known in Washington. In 2005, she bought the PC division of International Business Machines Corp.., IBM, for $ 1.25 billion – at the time, one of the largest acquisitions ever made by a Chinese company. Since then she has made several smaller businesses that required U.S. government approval. In June, Lenovo opened a factory in the state of North Carolina. More than a third of its twelve key executives are Western, according to the company website.

BlackBerry can venture to tolerate a bit of political opposition and an evaluation process to be prolonged rewarded with a higher price, says Jeff Bialos, a lawyer and former adviser to the U.S. State Department. “If all factors are equal, the [BlackBerry] rather be sold to a U.S. buyer,” says Bialos. “China was chosen as the highest value.”

In 2012, Lenovo has spent $ 110,000 on lobbying in the U.S., according to OpenSecrets.org. In 2011, U.S. $ 480,000. Both sums are relatively modest compared with other large technology companies. Hewlett-Packard Co., for example, spent $ 7.2 million on lobbying in 2012.

Regarding Canada, currently a proposal for a foreign firm to acquire a company in the country more than 344 million Canadian dollars (U.S. $ 334 million) requires an analysis of the government to see if the business will generate a “net economic benefit “, or cause some security risk to the country.

Canada’s Conservative government has rejected three proposed acquisitions of domestic assets by foreign companies since taking office in early 2006. But last year approved a $ 15.1 billion by which the Chinese state-owned CNOOC Ltd. bought the company for oil exploration oil sands Nexen Inc.

Lenovo

face competition for the BlackBerry, which in August was officially put on sale after years of losing market share to rivals such as Apple Inc. and Samsung Electronics Co.

Last month, the BlackBerry has reached a preliminary agreement to acquire for $ 4.7 billion by Fairfax Financial Holdings Ltd., Canadian insurer which is already one of the largest shareholders of the company. The private equity firm Cerberus Capital Management LP, has signed a confidentiality agreement, and the founders of BlackBerry Mike Lazaridis and Doug Fregin also consider offers.

Unlike some large Chinese companies, Lenovo, traded, not state. A report this year from research firm IDC showed that she became the world’s largest maker of PCs in the second quarter, surpassing Hewlett-Packard, while sales in the sector as a whole fell 12% from a year earlier.

Still, sales of Lenovo PCs also come down, and the company reports that it is trying to expand its smartphone business to get another source of growth.