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Canada: Blocked Egyptian merger deal could complicate Blackberry buyout

By  |  October 9, 2013

Canada’s recent blockage of the proposed buyout of fiber optic firm Allstream to Egyptian-controlled Accelero Capital Holdings, the Canadian government showcased its priority of national security over foreign buyouts of domestic firms and, some analysts say, could hint at future struggles for the planned acquisition of Blackberry.

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    Reports say the decision to block the buyout of the Manitoba Telecom Service’s fiber optic unit by a company controlled by Egyptian tycoon Naguib Sawiris may limit the scope of bidders for Blackberry, which is currently facing a bid by Canada’s Fairfax Financial Holdings.

    According to Ross Healy, portfolio manager with MacNicol & Associates, Canada may be open to such sales, but not necessarily to the first offer that comes along.

    Other analysts say Blackberry’s main suitors are primarily based in North America, easing concerns of national security for the nation. Canada can legally block buyouts from foreign companies under the Investment Canada Act if such a deal threatens national security or does not benefit Canada.

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