Blackberry, formerly known as RIM, has been on a downward spiral for many years now. The company has tried to stall the decline by launching high-end smartphones of its own but that hasn’t worked. Now, Blackberry has confirmed that it has agreed, at least in principle, to be taken over by Fairfax for a deal raking in $4.7 billion.
Fairfax Financial is a consortium of investors which is the largest shareholder in Blackberry, holding some 10% of the company’s shares currently. The reports of the deal come right at the heels of Blackberry’s decision to cut down another 4,500 jobs in an attempt to curb losses.
The company has further declared that due to rather poor sales of its new smartphones, it expects to register a loss of $1 billion. Although the BlackBerry 10 handsets are of a prime quality and pack good hardware, they are no match for the top-end iOS and Android devices which currently dominate the market.
In that context, it would make sense if the takeover by Fairfax is eventually confirmed. According to the statement issued by BlackBerry, it had ‘signed a letter of intent agreement under which a consortium to be led by Fairfax Financial Holdings Limited has offered to acquire the company subject to due diligence.’
However, it remains to be seen what will Fairfax do once it acquires BlackBerry. From the looks of it, the coalition of investors seems very optimistic of the deal and as per the statement by Fairfax Chief Executive, Prem Watsa, “We believe this transaction will open an exciting new private chapter for Blackberry, its customers, carriers and employees. We can deliver immediate value to shareholders, while we continue the execution of a long-term strategy in a private company with a focus on delivering superior and secure enterprise solutions to Blackberry customers around the world.”