Last week, a report claimed that Huawei had finalized a buyer for Honor’s smartphone business. Today, Reuters reports that Huawei has agreed to sell Honor, a smartphone brand within the Huawei Consumer Business Group, to a consortium of more than 30 agents and dealers. Buyers have announced they are setting up a new company called Shenzen Zhixin New Information Technology to complete the purchase.
Once the sale is over, Huawei will no longer own a stake in the new Honor brand. The deal will include everything from R&D opportunities, supply chain management and other Honor assets. Honor’s workforce includes over 7,000 employees.
A joint statement shared by a Chinese newspaper Shenzhen Daily Special Area, on behalf of more than 40 companies involved in the deal, said the sale was a “market investment made to save Honor̵
Since Huawei was placed on the US Department of Commerce’s List of Entities, the company has struggled to run its consumer hardware business. The company has adapted as well as it could, but is increasingly facing more severe challenges due to growing US restrictions. For example, because the US has effectively blocked Huawei’s suppliers to many chipmakers, the company will not be able to to have its own ARM-based SoC designs made by contract chip manufacturers such as TSMC. As such, the Kirin 9000 found in the Huawei Mate 40 series is expected to be the latest self-designed high-quality silicon from Kirin by Huawei and the company will have to turn to 4G chipsets from competitors such as Qualcomm or hope the Chinese manufacturing industry of semiconductors can amplify.
If Huawei is striving to become completely independent of US-based companies, then it will take a lot of money for that to happen. The deal to sell Honor could be the infusion of money that Huawei needs for these efforts. No figure has been released for the transaction, but a previous report said it was in the region of $ 15.2 billion. The previous report also claimed that the consortium’s goal after the acquisition of Honor would be to bring the company out of the public domain within three years.
With the completion of the sale, Huawei claims that it will continue to produce high-end smartphones and its corporate-oriented business. Meanwhile, Honor will continue to serve the middle class market around the world.