Blackberry is pondering a sale to a private equity firm, but Canada’s government may step in the way of a smooth transaction.

blackberry agm 20130709 Blackberrys uncertain future as a public company

The long rumored sale of Blackberry is one step closer to happening.

Early Monday Eastern time the company announced that its board of directors had formed a special committee to explore “strategic options” including alliances, joint partnerships, to the outright sale of the company in order to strengthen the brand and boost sales of Blackberry platform.

“As the Special Committee focuses on exploring alternatives, we will be continuing with our strategy of reducing cost, driving efficiency and accelerating the deployment of BES 10, as well as driving adoption of BlackBerry 10 smartphones, launching the multi-platform BBM social messaging service, and pursuing mobile computing opportunities by leveraging the secure and reliable BlackBerry Global Data Network,” CEO Thorsten Heins said in a statement.

Though sale of the company is only one option on the table, Blackberry’s stock is currently surging through the Monday trading day on the possibility.

While Blackberry management spoke at length with Silver Lake Management, the private equity firm that may take Dell private, it hasn’t announced a definite suitor for the deal, nor has any firm spoken up with more than passing interest.

If, however, the equity firm that takes Blackberry private is an American firm, it may have to contend with the Canadian government putting roadblocks in the way of the deal.

Foreign takeovers of a Canadian firm are regulated by the Investment Canada Act, which has a number of thresholds that trigger a review by Canada’s Industry Minister. When the buyer is a from a WTO member country a review is triggered when the target company’s assets are over $1-billion (Canadian, as of Jan 1 2014). Reviews are also triggered if the government deems the company is of a “strategic interest” to Canada. Should the review prove the purchase will be a “net benefit” to Canada, it is given the green light. If not, the government blocks the sale.

Statistically speaking, Industry Ministers’ of Canada’s conservative government have a mixed track record of approving large corporate purchases by foreign buyers. Vancouver-based military contractor MacDonald Dettwiler and Associates (maker of the Canada Arm) got a no-go for sale to an American firm in 2008, as did PotashCorp’s sale to Australia’s BHP Billiton in 2010; Calgary-based Nexen got the OK to sell part of itself to China National Offshore Oil Corporation in December of 2012.

While Canada’s Prime Minister, Stephen Harper, has said to the press last year, “We all know [RIM] is an important Canadian company,” it is unclear whether his government would play an activist role in attempting to block RIM’s sale under the Investment Canada Act.

Former Industry Minister Christian Paradis said to Reuters in January: “It’s speculation and each decision on each case is based on its own merit, so it would premature for me to speculate on any of these kinds of cases. So if something was going to occur, then we would have to determine if it was reviewable or not, depending on the threshold (of the value of the transaction), and then we go with the net-benefit test.”

Current Industry Minister James Moore has not yet spoken publicly about the potential sale of Blackberry to an American firm.

The other option would be for a Canadian private equity firm to take Blackberry private. The Ontario Teacher’s Pension Plan, funded by pension payments of all of the teachers in Canada’s biggest province of Ontario, has a large amount of equity at its disposal and a track record for tech savvy buys. Coupled with investments from other Canadian private equity funds, this group might have what it takes for the deal to be done.

Of course the government could determine that Blackberry is not of strategic benefit to Canada, and the sale of some net benefit. Then the deal could go through with an American buyer, assuming one is interested.