BlackBerry Ltd has announced that it is ditching its plans to sell itself to Fairfax Financial Holdings or to other potential buyers. This could indicate another shift in the troubled company’s approach to address its current problems. Interestingly, the announcement came with a few other surprising changes at the Canadian smartphone maker.
A tentative deal between Fairfax and BlackBerry was announced in September. That time, the two parties already agreed to a $4.7 billion acquisition that is set to close this day (November 4). However, according to well-placed sources, Fairfax was not able to generate enough financing to finally close the deal.
Investing into BlackBerry
Other potential buyers have also stepped in to make the company private. But now, those suitors would also have to change strategy if they really aim to invest in BlackBerry. At the same time, it is not goodbye yet for Fairfax as the firm would instead invest $250 million into BlackBerry, together with other investors. Within two weeks, it is expected that potential investors would join in to complete the proposed $1 billion private investment.
In a statement, the company said the new strategy was set after a thorough review of approaches and alternatives by the company’s board. BlackBerry also assured that its current course of action is in line with the best interests of the company and its constituents, including customers and shareholders.
Consequently, CEO Thorsten Heins would step down from his post upon the failure of the Fairfax deal. Within two weeks, former CEO and chairman of Sybase John Chen would step in to take an interim CEO position. He would also serve as executive chair of the company’s board.
Heins joined BlackBerry (then Research In Motion or RIM) in December 2007. He used to work for Siemens Communications Group. In August 2011, he was appointed as COO for Product and Sales. He was eventually appointed as CEO of BlackBerry in January 2012. That appointment ended the leadership of co-founders Jim Balsillie and Mike Lazaridis, who had been jointly heading the firm for about two decades.
From the start of his leadership, the company has been struggling to stage a turnaround. BlackBerry 10 OS was delayed until 2013, while the new line of handsets failed to compete against competing devices from rivals Apple Inc and Samsung Electronics. At one point, Microsoft Corp’s lackluster Windows Phone devices even outpaced BlackBerry smartphones.
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