Last week, a report claimed Huawei had finalized a buyer for Honor’s smartphone business. Today, Reuters is reporting that Huawei has agreed to sell Honor, a smartphone brand under the Huawei Consumer Business Group, to a consortium of over 30 agents and dealers. The buyers announced they’re setting up a new company called Shenzen Zhixin New Information Technology to complete the purchase.
Once the sale is complete, Huawei will no longer hold any share in the new Honor brand. The deal will include everything from R&D capabilities, supply chain management, and other Honor assets. Honor’s workforce includes over 7,000 employees.
A joint statement, shared by Chinese newspaper Shenzhen Special Zone Daily, on behalf of the more than 40 companies involved in the transaction said the sale is a “market-driven investment made to save Honor’s industry chain.” After the change of ownership, Honor will continue as usual, with no impact on production expected.
Ever since Huawei was placed on the U.S. Commerce Department’s “Entity List,” the company has found it difficult to operate its consumer hardware business. The company has adapted about as well as it could, but in order to continue, it decided it needed to sell Honor in order to stay afloat.
No figure for the transaction was revealed, but a previous report claimed it was in the region of $15.2 billion. The previous report also claimed that the consortium’s goal after purchasing Honor would be to take the company public within three years.
With the sale now complete, Huawei will allegedly put its focus on continuing to make high-end smartphones and its corporate-oriented business. Honor, meanwhile, will continue to cater to the mid-range market across the globe.
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