BlackBerry ripe for takeover by Lenovo

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BlackBerry ripe for takeover by Lenovo

By Gao Yuan (China Daily) 15:09, November 02, 2013

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BEIJING, Nov. 2 (Xinhuanet) -- Lenovo Group Ltd will "actively consider" acquisitions in the mobile consumer electronics industry, said Yang Yuanqing, chairman and chief executive officer of the world's largest personal computer maker.

Yang's remarks came amid reports that the Chinese company is in talks with embattled BlackBerry Ltd on a merger possibly worth 4.7 billion U.S. dollars.

"Mergers and acquisitions are always useful tools for us to expand business into new markets, and we are open to deals that can boost our business," the CEO said on Friday.

Lenovo, headquartered in Beijing, has long been rumored to be an active bidder for BlackBerry, which has been losing ground to Apple Inc and Samsung Electronics Co Ltd in the high-end smartphone sector.

In mid-October, The Wall Street Journal reported that Lenovo signed a nondisclosure deal to examine the books of the Canadian smartphone maker, which could pave the way for a possible acquisition.

The Chinese company is borrowing roughly 1.5 billion U.S. dollars from banks for the deal, Reuters said.

"We have to prepare enough fodder for the next move," Yang told reporters. But he refused to confirm the BlackBerry bid.

Other potential suitors are said to include Google Inc, SAP AG and Facebook Inc.

"BlackBerry's patents and channel partner resources are valuable assets for Lenovo," said James Wang, a Shanghai-based analyst at research firm Canalys.

Telecom operators are the biggest smartphone sellers in developed economies, and Lenovo needs such resources if it wants to enter US and European markets, according to Wang.

Lenovo will make its way to developed markets by 2015 after it enters such emerging economies as Russia, Brazil and Southeast Asia, Yang said.

The company is the second-largest smartphone vendor in China after Samsung. It also enjoys about 10 percent of market share in Southeast Asian countries.

Smartphones and tablets are the weapons Lenovo will use to advance into the United States and the European Union.

The company plans to sell at least 10 million tablets in the fiscal year that ends next March.

Its tablet shipments the previous fiscal year totaled 1 million.

"Smartphones and tablets are both profitable at the moment, and we will constantly be looking at ways to expand our business," said Yang.

The company also launched an assembly plant in the central city of Wuhan, Hubei province. Annual mobile device shipments from the plant are estimated to reach 100 million.

Liu Jun, the Lenovo senior vice-president who heads its consumer product unit, said strong delivery power will help the company sell its products at a better price, which will help gain more customers at the lower end of the market.

(Source: China Daily)