Huawei has confirmed an agreement to sell its consumer smartphone brand Honor and related business to a consortium led by the city of Shenzhen and local dealers of Honor products. No financial details of the deal were closed.
Huawei said its consumer business had been under "tremendous pressure as of late" due to difficulties obtaining the necessary components following US sanctions against the group. The Honor sale is expected to help support local dealers and sellers in China, allowing the company to develop its own supply chain separate from Huawei.
Started in 2013, the Honor brand was developed to help Huawei target the mid-range and lower end of the smartphone market and reach more young people. The company said Honor ships over 70 million units annually, compared to total shipments of 240 million at Huawei group last year.
Huawei will sell all its shares and not have any management relationship with the new Honor company. The new owner is called Shenzhen Zhixin New Information Technology Co, a company controlled by Shenzhen Smart City Development Group, according to Chinese media. Over 30 agents and dealers of the Honor brand are participating and first proposed this acquisition, Huawei said.
Reuters reported earlier that the takeover could be worth over CNY 100 billion. According to its sources, the distributor Digital China looked at the deal but was not part of the final consortium buying Honor.
