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October 10, 2013

Canada’s veto clouds BlackBerry’s search for buyer

Cancelled sale of the MTS’ Allstream unit to Egyptian telecom tycoon, Naguib Sawiris.

By CBR Staff Writer

The Canadian government’s latest decision to veto the sale of the Manitoba Telecom Services’ (MTS) Allstream unit to an Egyptian telecom tycoon, Naguib Sawiris, could now impact the sale of struggling smartphone maker Blackberry to a foreign firm, industry watchers warn.

Reports also warn that the move would limit the number of possible buyers of BlackBerry, or even the foreigners willing to enter into Canada’s telecom industry, while also rule out all except a few well-established firms in North America.

Citing national security concerns, the government also discarded MTS and Accelero Capital’s offer to implement required measures to deal with those concerns.

In September, Blackberry entered in principle agreement with a consortium led by Fairfax Financial for the sale of its assets for about $4.7bn (£3bn).

Recent reports reveal that tech firms including Google, SAP, Cisco and Samsung are among several firms interested to acquire part or the entire stake of the struggling smartphone maker.

The country has been rarely using its veto power to block the acquisition of a Canadian firm by foreign entities under the Investment Canada Act.

Under the law, Canada had also blocked BHP Billiton’s $39 billion bid to acquire fertiliser firm Potash in 2010, as well as a 2008 sale of MacDonald Dettwiler’s sale of Alliant Techsystems.

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