Huawei is considering selling the Honor smartphone unit to a consortium of buyers in a bid to ensure its survival amid crippling US sanctions, according to a statement late Monday.
“The acquisition represents a market-driven investment made to save Honor’s industrial chain,” Huawei said in a joint statement released with a group of more than 30 Chinese resellers and agents.
“It is the best solution to protect the interests of Honor consumers, resellers, suppliers, partners and employees.”
The announcement of the sale comes as Huawei’s consumer business struggles to stay afloat following tougher sanctions imposed by the Trump administration on the Chinese company, including measures thatTerms of the deal were not disclosed, but a Reuters report earlier this month said the deal could fetch more than $15 billion. After the sale is completed, Huawei will no longer hold any shares in the new Honor company, Huawei said in a statement.
Honor is a sub-brand of Huawei that sells low-cost smartphones designed for young consumers in its native China as well as overseas, including Europe and Southeast Asia. The seven-year-old company ships 70 million phones a year, according to the statement. Honor products often rely on Huawei’s technology, and some Honor phones run on Huawei’s cutting-edge Kirin chipsets.
“Huawei’s consumer business has been under tremendous pressure lately,” the company said in the statement. “This is due to a persistent unavailability of the technical elements necessary for our mobile telephony activity.”
“This decision was made by Honor’s industrial chain to ensure its own survival,” Huawei said.
The purchase will be made by a new company called Shenzhen Zhixin New Information Technology Co, according to the joint statement. It was founded by the aforementioned consortium of buyers and a technology company called Shenzhen Smart City Technology Development Group Co, which was formed by the government of the Chinese city of Shenzhen.