Huawei is reportedly selling its Honor brand to a Chinese consortium for $15 billion
What you need to know
- As per a report from Reuters, Huawei plans to sell its Honor smartphone unit to a consortium led by Digital China in a $15.2 billion deal.
- The deal is expected to be announced as soon as Sunday.
- Honor reportedly plans to retain most of its 7,000-plus workforce after the sale.
Huawei has decided to sell its Honor smartphone unit to a consortium led by Digital China and the Shenzhen government, according to a new report from Reuters. Per the report, the consortium will be paying Huawei 100 billion yuan ($15.2 billion) for the Honor brand. The deal is likely to be formally announced as soon as Sunday.
The sale will include not just the Honor brand, but also its R&D capabilities and supply chain management. Digital China, which is the main distributor for Honor, will have a near-15% stake in the company after the deal is completed. Digital China has also been working with Huawei in other businesses, such as cloud computing.
According to people familiar with the matter, Honor will retain most of its 7,000-plus workforce and management team after the sale. It also plans to go public within three years.
Huawei had launched the Honor brand in 2013 with an aim to take on Chinese rivals such as Xiaomi, OPPO, and Vivo in the competitive budget smartphone segment. Due to the recent U.S. sanctions, however, the company has been forced to change its strategy and shift its focus to the high-end segment. According to estimates from Canalys, Honor smartphones made up 26% of the 51.7 million devices Huawei shipped globally in the third quarter of the year.
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