Summary
The post analyses reports of Samsung’s potential acquisition of Blackberry, despite denials by both companies. It focuses on Blackberry’s extensive patent portfolio, which covers security, business solutions, and automotive software, as the main attraction for Samsung. Previous takeover offers from other technology firms have been declined by Blackberry, which prefers restructuring. Any such deal would require Canadian government approval, considering national security and economic benefit. The acquisition could significantly strengthen Samsung’s position against competitors like Apple and Chinese smartphone makers, with broader implications for Google.
Samsung’s Interest in Blackberry
Reports emerged in early 2015 that Korean technology company Samsung Electronics was considering the acquisition of Blackberry for $7.5 billion, notwithstanding statements from both companies describing the reports as “groundless”. The speculation drove the Canadian smartphone maker’s stock up 30 per cent before it retreated by 17 per cent. The prospect of the acquisition raised a central question for IP observers: what makes Blackberry an attractive target?
The Patent Portfolio
The principal draw, according to analysts, is Blackberry’s patent portfolio of approximately 44,000 patents valued at over $1.43 billion. Those patents span security technologies, enterprise (business-to-business) applications, and Blackberry’s in-car entertainment software. The portfolio would give Samsung material to strengthen its competitive position against Apple and other market participants. Blackberry’s management had reportedly declined to sell individual assets — an acquirer would therefore need to bid for the entire company. Prior approaches from Intel, Google, and Lenovo were similarly declined. The Blackberry board was said to take the view that a restructuring would deliver greater value than an outright sale.
In a development that preceded the acquisition reports, Samsung and Blackberry had already entered into a management-services partnership, described at the time as an unusual collaboration between competing manufacturers.
Canadian Government Approval
Any transaction between Samsung and Blackberry would require the consent of the Canadian government. Under Canada’s foreign investment review framework, acquisitions exceeding $296 million are evaluated to determine whether the deal is of net benefit to Canada. The government also applies a national security assessment. Canada’s then Minister of Finance, Joe Oliver, declined to comment on the government’s position regarding the prospective transaction.
Competitive Implications
Industry analysts observed that the acquisition would bolster Samsung’s capacity to compete with Apple’s new iPhones and with Chinese manufacturers including Xiaomi Corp. and Huawei Technologies Co. in the mid-market segment. An expansion of Samsung’s standalone non-Android software holdings would also be of concern to Google, for which Samsung represents its largest Android hardware partner.
Disclaimer
This article is for general information and does not constitute legal advice. Readers should consult a qualified attorney before acting on any matter discussed here.