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Huawei
Tech

Huawei said to divest Honor smartphone business for US$15 billion to Chinese consortium

  • A group led by Digital China and the Shenzhen government is said to take over almost all of Honor’s assets, including research and development capabilities
  • The deal is expected to help Huawei sharpen its focus on sourcing hi-tech components for its namesake smartphones amid US trade sanctions

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Huawei Technologies’ budget smartphone brand Honor has generated revenue of more than US$10 billion in the past five years, according to the company. Photo: Reuters
Celia ChenandJane Zhang
Huawei Technologies plans to divest its Honor budget smartphone business in a deal worth 100 billion yuan (US$15.1 billion) to a consortium led by information technology services firm Digital China Group, according to a Reuters report on Tuesday.
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The all-cash sale will include almost all assets including brand, research and development capabilities, and supply chain management, according to the report, which cited people with knowledge of the matter.

Huawei had no comment on the reported divestment.

In a filing to the Shenzhen stock exchange on Wednesday, Digital China said it has not reached any deal with Huawei in relation to Honor.

Speculation about such a sale intensified last month when a report by TF International Securities analyst Kuo Ming-chi said sourcing smartphone components by an independent Honor “will no longer be subject to the US ban on Huawei”.

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Kuo, who became famous for his predictions about Apple’s product development, indicated that the move would enable Honor, part of the Huawei consumer business group’s dual-brand strategy, to pursue development of higher end smartphone models and better compete against Xiaomi Corp, which offers handsets in a similar price range.

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