It’s official: Huawei sells Honor to a consortium of Chinese companies

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Last week, we heard that Huawei was planning to sell its affordable smartphone brand Honor, which was being indirectly affected by the American veto. Today, Reuters reports that Huawei has agreed to sell Honor to a consortium of more than 30 agents and distributors. The buyers announced that they are creating a new company called Shenzen Zhixin New Information Technology to complete the purchase. Once the sale is complete, Huawei will no longer have any stake 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 more than 7,000 employees. A joint statement, published by the Chinese newspaper Shenzhen Special Zone Daily, on behalf of the more than 40 companies involved in the transaction indicates that the sale is a “market-driven investment made to save Honor’s industrial chain.” Since Huawei was included in the “Entity List” of the US Department of Commerce, the company has had difficulties in its consumer hardware business. For example, the company can no longer make its own Kirin chips, and will have to turn to 4G chips from competitors like Qualcomm. With the sale, Honor will get rid of these restrictions. No figures for the transaction have been disclosed, but a previous report claimed it was about $ 15.2 billion (€ 13,000). The previous report also stated that the goal after the purchase would be to take the company public within three years. With the sale now complete, Huawei will reportedly focus on high-end smartphones and its enterprise-oriented business. Honor, for its part, will continue to focus on the mid-range market around the world.

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