It was reported, quite recently, that Huawei plans to sell its HONOR brand. Well, and it’s now official. A joint statement has been released, by 40 companies that are involved in the purchase. You read that right, 40 companies.
Huawei has agreed to sell the HONOR business to a consortium of over 30 agents and dealers, reports Reuters. Huawei will not hold any shares of the new company after the sales goes through.
The buyers will set up a new company called Shenzhen Zhixin New Information Technology, to make this purchase. This change of ownership will not impact HONOR’s development direction, it is stated in the statement.
It’s official, Huawei agrees to sell HONOR in its entirety
Do note that this deal includes everything from the company’s R&D department, supply chain management, and various other HONOR assets. It’s also worth noting that HONOR employs over 7,000 people.
The main reason for this sale is the US ban, that’s for sure. Ever since Huawei was placed on the US Commerce Department’s Entity List, it tried to adapt, but it hasn’t been easy. HONOR, being Huawei’s company, has been facing various challenges.
If not for this ban, HONOR would have probably stayed Huawei’s company. This way, Huawei seems to be adapting to the new situation, and is trying to ensure its financial stability.
Do note that the worth of this deal has not been published in the statement. A previous report did claim that the business is worth around $15.2 billion, though. Take that with a grain of salt, as that is not the official figure.
Following this deal, both Huawei and HONOR will probably carry on as before. Huawei will focus on the high-end sector and a corporate-oriented business, while HONOR will continue manufacturing budget products. That is, at least what is expected to happen, but it remains to be seen. Nothing is guaranteed at this point, as HONOR is no longer owned by Huawei.