The Chinese company Huawei has agreed to sell its subsidiary smartphone brand Honor for $ 15.2 billion. The company will be acquired by a consortium led by Digital China (the main distributor of Honor devices) and Shenzhen’s government, where Huawei is headquartered. This is reported by Reuters, citing sources familiar with the negotiations.
Rumors of Huawei’s plans to sell Honor appeared in mid-October, but then it was reported that several buyers were claiming the subsidiary, and the deal was estimated at $ 3.7 billion. The decision to sell the Honor brand to Huawei was made due to the US authorities’ sanctions on Huawei. These restrictions have seriously complicated the company’s smartphone production and made it impossible for Huawei to install Google services on its Android devices.
According to Reuters, Huawei will officially announce the Honor sale this Sunday, November 15th. It is assumed that the company will sell almost all of the assets associated with the Honor brand, and the consortium will pay for the purchase with money that Digital China will receive in the form of bank loans. After the sale, Honor is slated to retain most of its management team and more than 7,000 employees, as well as to conduct an IPO over the next three years, Durov’s Code writes.
Representatives from Huawei, Honor, Digital China and the Shenzhen government did not respond to comments. Honor declined to comment on the deal.
We will remind the US authorities have repeatedly accused Huawei of espionage in Beijing’s interests using backdoors in equipment. Chinese company officials have denied the allegations. At the same time, according to one of Reuters’ sources, the deal means that Huawei does not harbor hopes of easing sanctions in connection with the election of Joe Biden to the presidency of the United States.