Huawei plans to sell budget-brand smartphone unit Honor in a 100 billion yuan (US$15.2 billion) deal to a consortium led by handset distributor Digital China and the government of its home town of Shenzhen, people with knowledge of the matter revealed.
The plan comes as United States restrictions on supplying Huawei Technologies Co force the world’s second-biggest smartphone maker — after South Korea’s Samsung Electronics Co — to focus on high-end handsets and corporate-oriented business, the people said.
The all-cash sale will include almost all assets, including brand, research & development capabilities and supply chain management, the people said. Huawei could announce it as early as Sunday, one of the people said.
Main Honor distributor Digital China Group Co will become a top-two shareholder of sold-off entity Honor Terminal Co with a near-15 percent stake, said two of the people. Honor Terminal was incorporated in April and is fully owned by Huawei, the corporate registry showed.
Digital China, which also partners Huawei in businesses such as cloud computing, plans to finance the bulk of the deal with bank loans. It will be joined by at least three investment firms backed by the government of financial and technology hub Shenzhen, with each owning 10 percent to 15 percent, they said.