The Motley Fool

Could Microsoft Corporation Acquire BlackBerry Ltd.?

In an article published last week, I listed a few companies that might be interested in buying BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY). The list of potential suitors included Samsung, Google Inc., Apple Inc., and even Lenovo.

But there was one big name left off of that list: Microsoft Corporation (NASDAQ:MSFT). Ironically, rumours surfaced later last week that Microsoft was considering such an acquisition. BlackBerry’s shares briefly spiked in response.

So, would Microsoft consider such a move? Below we take a look.

Why Microsoft would want to buy BlackBerry

Interestingly, Microsoft has had this opportunity before. Back in late 2013 BlackBerry was looking to sell itself, and Microsoft was considered one of the potential suitors. But the Seattle-based tech giant opted to buy Nokia instead, a move that cost US$7.2 billion.

At the time BlackBerry’s patent portfolio was considered the key prize, and that certainly remains the case.

But there are other aspects of BlackBerry that Microsoft should find attractive. BlackBerry’s leadership position in security would help Microsoft win over large enterprise customers. BlackBerry’s QNX operating system is very well positioned in the Internet of Things industry (remember, Ford replaced Microsoft with QNX for its in-vehicle infotainment systems). BBM would also be a nice asset to have.

Why Microsoft will stay put

While a BlackBerry acquisition would come with plenty of benefits, there are plenty of reasons why this simply won’t happen.

First of all, Microsoft’s Nokia acquisition hasn’t really paid dividends thus far, and is looking like a mistake. So, it would seem very strange for Microsoft to buy a company like BlackBerry so soon afterwards.

Secondly, Microsoft is already offering its own version of mobile device management (MDM), competing with BlackBerry on this front. In fact, Microsoft is offering some MDM services for free to customers with Office 365 commercial plans. So, Microsoft doesn’t really need BlackBerry at this point.

Finally, BlackBerry has already rejected a generous offer from Samsung, according to anonymous sources. Microsoft must know that any bid would probably go nowhere.

The verdict

In the near term, it’s unlikely any company will buy BlackBerry, mainly because the asking price is far too high. But if BlackBerry struggles to grow, then the company will face more pressure to sell itself, and numerous tech companies will still have their eyes on that patent portfolio. Samsung still seems like the most likely suitor, but Microsoft will surely be in the mix.

5 TSX Stocks for Building Wealth After 50

BRAND NEW! For a limited time, The Motley Fool Canada is giving away an urgent new investment report outlining our 5 favourite stocks for investors over 50.

So if you’re looking to get your finances on track and you’re in or near retirement – we’ve got you covered!

You’re invited. Simply click the link below to discover all 5 shares we’re expressly recommending for INVESTORS 50 and OVER. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a brief time only.

Click Here For Your Free Report!

Fool contributor Benjamin Sinclair has no position in any stocks mentioned. David Gardner owns shares of Apple, Google (A shares), and Google (C shares). Tom Gardner owns shares of Google (A shares) and Google (C shares). The Motley Fool owns shares of Apple, Google (A shares), and Google (C shares).

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.