According to news from the investment banking community, Lenovo is indeed participating in the bidding for BlackBerry. His three opponents are BlackBerry's largest shareholder, Fairfax Financial Holdings Limited (Fairfax Financial Holdings Company, hereinafter referred to as Fairfax); Cerberus Capital Management (Bolong Capital Management Co., Ltd., hereinafter referred to as Bolong Capital), which is good at handling non-performing assets Founder Mike Lazaridis (Mike Lazaridis).
Although Fairfax signed a 4.7 billion dollar letter of intent with BlackBerry as early as late September, this does not mean that Lenovo did not have a chance. BlackBerry announced that it will consider other offers before Fairfax completes due diligence on November 4th. Program. This means that companies such as Lenovo have two weeks from today to come up with more attractive bidding proposals.
In the eyes of overseas media and analysts, the $ 4.7 billion price quoted by Fairfax as the major shareholder reflects the bottom line of the price of the major shareholder's sale of BlackBerry, but Fairfax itself may not actually purchase at this price. TechCrunch previously reported that Fairfax could not attract partners to ensure sufficient funds were collected; while Pierre Ferragiu, an analyst at US investment agency Sanford Bernstein, simply believed that the possibility of Fairfax acquiring BlackBerry was zero.
Lenovo Group, which still has a huge net cash reserve of US $ 3.1 billion, is definitely one of the more promising BlackBerry bidders. However, obtaining access to BlackBerry financial information is just the beginning. It is difficult to judge Lenovo ’s decision at the last minute. The pros and cons of BlackBerry are split, and it is also the biggest challenge Lenovo has encountered in the development of M & A after the acquisition of Thinkpad in 2005.
Three advantages of Lenovo acquiring BlackBerry
Yang Yuanqing, chairman of Lenovo ’s board of directors, told the media at the August financial report that the company would “proactively attack†the acquisition issue. BlackBerry is clearly an object worth Lenovo's initiative, after all, this Canadian company was once the leading manufacturer in the field of business smartphones.
Despite the double blows from Apple ’s iPhone and Android phones, BlackBerry, which has lost its innovative ability, is gradually losing its competitiveness. But this does not mean that the value of this company will shrink indefinitely. In addition to $ 2.6 billion in cash, Scotiabank estimates that the valuation of patented assets held by BlackBerry is $ 2.25 billion.
Lenovo's acquisition of BlackBerry has three major advantages. The first is the experience of merger and acquisition of IBM's ThinkPad business. As the only company in the domestic IT field that can stage a "snake-eating elephant" smoothly, and it has become the number one PC market in counterattack, it is currently the most internationalized among many domestic manufacturers. And as a representative of private enterprises, Lenovo has the ability to minimize the political impact of BlackBerry acquisition.
Lenovo phones are extremely eager to open up the high-end market. Just in late September, Lenovo also launched the VIBE brand, aiming at overseas markets and high-end markets. Obviously, BlackBerry is always more experienced than Lenovo in these two fields. Once Lenovo can successfully acquire BlackBerry, Lenovo can quickly become a money-making machine in the overseas market and high-end mobile phone market like ThinkPad.
BlackBerry itself has $ 2.6 billion in cash and $ 2.25 billion in patents. This is good news for any bidding company, which means that if managed properly, BlackBerry can only rely on its own cash to support the development of the BlackBerry business for several years.
Three major problems in Lenovo's acquisition of BlackBerry
Although according to the Wall Street Journal, Lenovo has obtained the right to access financial information from BlackBerry, but this is just the beginning. It is difficult to judge Lenovo's final decision until the last minute. After all, it is not only Lenovo and Fairfax that are participating in the bidding, whether it is Bolong Capital or the founder of BlackBerry will be a strong contender for Lenovo.
At the same time, the enthusiasm shown by Lenovo does not necessarily mean that it will really go all out in mergers and acquisitions. Since the merger of IBM ’s Thinkpad business in 2005, Lenovo ’s several mergers and acquisitions in Germany, Japan and Brazil have been low-key and rapid. In contrast, this bid for BlackBerry, Not only did the media and investment bank news continue, but even some financial figures lavishly promoted the relevant insider, casting a shadow over the bid.
In fact, there are still three major problems that need to be solved in Lenovo's acquisition of BlackBerry. The most critical is the complex audit work. The Canadian Investment Law provides that if the acquisition of Canadian companies or assets by foreign companies does not bring "net benefits" to the country or pose a threat to national security, then the government has the right to veto the transaction. . In addition, the US Overseas Investment Commission will also participate in the review of this merger.
BlackBerry phones are not well-known in emerging markets such as China. Lenovo expects the mobile phone business to succeed in the fast-growing emerging markets. The lack of an international brand such as BlackBerry that sells a touch-screen phone can bring a limited brand premium.
Lenovo is also unable to promote BlackBerry's autonomous operating system. Although BlackBerry has a well-regarded BlackBerry 10 operating system, the current market situation has been fixed, and even Microsoft WP is difficult to get a chance to share. Today, Lenovo does not have the resources and capabilities to promote this system. Even if Samsung's sales volume is so high, it is difficult to cultivate its own operating system. After all, the construction of the ecological environment is a big problem.
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