Samsung, BlackBerry deny talk of mobile megamerger

BlackBerry says it has not engaged in discussions with Samsung, while Samsung called the report "groundless."

Roger Cheng Former Executive Editor / Head of News
Roger Cheng (he/him/his) was the executive editor in charge of CNET News, managing everything from daily breaking news to in-depth investigative packages. Prior to this, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade and got his start writing and laying out pages at a local paper in Southern California. He's a devoted Trojan alum and thinks sleep is the perfect -- if unattainable -- hobby for a parent.
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  • SABEW Best in Business 2011 Award for Breaking News Coverage, Eddie Award in 2020 for 5G coverage, runner-up National Arts & Entertainment Journalism Award for culture analysis.
Roger Cheng
3 min read

Could BlackBerry be the next conquest of Samsung's vast electronics empire?

BlackBerry CEO John Chen at a November event announcing a partnership with Samsung. Nate Ralph/CNET

Samsung executives met with BlackBerry last week with an acquisition offer that was as high as $7.5 billion, according to Reuters, which cited an unnamed source. The Korean tech titan reportedly proposed an initial range of $13.35 to $15.49 a share, representing a 37.4 percent to 59.5 percent premium over its closing price on Tuesday.

Shares closed up 30 percent to $12.59 on Wednesday.

BlackBerry later issued a statement denying that it had engaged in discussions with Samsung on a potential acquisition. The company declined to comment further.

A combination would wed Samsung, the world's largest smartphone maker, with BlackBerry, a company that watched its vast market position in the mobile world evaporate, but retains critical corporate and government clients. Samsung is looking to access BlackBerry's extensive patent portfolio, which is geared toward mobile technology, according to Reuters.

A Samsung spokesman called the report "groundless."

BlackBerry, which has fallen from its perch as one of the top smartphone makers to a niche player, has long been bandied about as an acquisition target for companies ranging from Chinese telecom vendors to Google. Samsung was previously rumored to be interested in BlackBerry in 2012, but the company quickly squashed the idea.

Samsung has in the past dismissed this kind of speculation. Josh Miller/CNET

But BlackBerry and Samsung have forged new ties, in November announcing a partnership in which the BlackBerry Enterprise Services 12 platform would work with Samsung's business-centric Knox software for mobile devices.

And some of the top executives in Samsung's enterprise business came from BlackBerry (back when it was known as Research in Motion). Robin Bienfait, who became chief enterprise innovation officer for Samsung Electronics a year ago, spent six years at BlackBerry, including serving as the company's chief information officer before she left the company at the end of 2012. And Timothy Wagner, senior vice president of Samsung business sales at the US branch of the electronics giant, worked at BlackBerry for nearly five years before he joined Samsung in December 2010. Both have been tasked with growing the company's footprint with business users.

Samsung has long said that it sees getting its mobile devices into the business world as a growth opportunity. That's become particularly important with Samsung struggling financially, saying last week that it expects a fifth consecutive drop in operating profit in the fourth quarter.

Samsung is getting squeezed in the market for budget phones by Chinese vendors such as Xiaomi, but could see relief at the high end in the business side. While BlackBerry's market position is largely gone, it still has a reputation for security and its own secure network infrastructure that could help Samsung.

In the third quarter, BlackBerry's share of the global smartphone operating system market was at 0.5 percent, compared with Google's Android at 84.4 percent, according to IDC.

But BlackBerry's Chen has done an admirable job of steering the company out of the danger zone by putting it on a path that is focused more on business software. While BlackBerry launched four devices last year, much of its attention has been on strengthening its BES 12 offering and in areas such as its BBM messenger service.

Chen, speaking at a press conference last week at the Consumer Electronics Show, pushed BlackBerry's entry into the business of Internet of Things, or the concept that everything can be connected and talk to each other. He also looked back at the difference between BlackBerry from a year ago and today: "We're not in financial trouble; we're here to stay," he said.

Updated at 2:20 p.m. and 2:41 p.m. PT on Jan. 14, and 5:24 a.m. PT on Jan. 15: With details about Samsung executives and to add a denial by BlackBerry.

-Shara Tibken and Rich Trenholm contributed to this report.