Huawei Technologies has chose to sell all of its Honor business assets to Shenzhen Zhixin New Information Technology Co, a decision made in light of "this hard time", Huawei said in a statement on Tuesday.
The buyers said this is a market driven investment to save Honor's industry chain.
"Once the sale is complete, Huawei will not hold any shares or be involved in any business management or decision-making activities in the new Honor company", Huawei said.
Huawei chose to sell off its Honor brand at a time when the company is facing several hurdles to keep doing business.
Huawei lost major chip and software suppliers after the US government slapped trade sanctions on the telecoms equipment and smartphone giant. Over 30 agents and dealers of the Honor brand first proposed the acquisition, Huawei said.
The sale will bring cash flow to Huawei and allows the possibility of buying Honor back in the future, he said. As quoted from its official press release, dated 17 November 2020, the sale only relates to its "business assets".
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The sale comes as the USA squeezes Huawei's overseas businesses, including network infrastructure and consumer smartphones. Honor is now the property of fellow Chinese citizens who are now forming a new company called the Shenzhen Zhixin New Information Technology.
(Pocket-lint) - The rumour had been floating around for some time, but now it's official: Huawei is selling Honor. "It is the best solution to protect the interests of Honor's consumers, channel sellers, suppliers, partners and employees".
Members in the consortium include Shenzhen Smart City Technology Development Group, a state-backed organization tasked with promoting cloud, 5G, smart city tech amongst other state enterprises; China Postal and Telecommunications Appliances, a state-owned distribution provider of telecoms products; and electronics retailers like Suning and Sundan. "If it's no longer a Huawei entity, it's unclear whether the whole smartphone supply chain would provide the same support as in the past", said Jeff Pu, a veteran smartphone analyst with GF Securities. For reference, Chinese brands like OPPO, Vivo, and Xiaomi operate without such restrictions.
Either way, it's clear that Huawei's placement in the US Entity List previous year has significantly dampened Huawei's (and its subsidiaries') ambitions of being the largest smartphone company in the world.