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Huawei is selling its Honor unit to Shenzhen Govt, Digital China, and others for $15 million

Huawei plans to sell the budget-brand smartphone unit Honor in a $15.2 billion deal to a consortium led by its own handset distributor Digital China

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VoicenData Bureau
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Huawei plans to sell the budget-brand smartphone unit Honor in a 100 billion yuan ($15.2 billion) deal to a consortium led by its own handset distributor Digital China

After long rounds of talks, Chinese telecom giant Huawei firmed up the buyers of its youth-focused device range unit Honor. Huawei plans to sell the budget-brand smartphone unit Honor in a 100 billion yuan ($15.2 billion) deal to a consortium led by its own handset distributor Digital China and the Government of its home town of Shenzhen.

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It is believed that Xiaomi and one of TCL Communication’s group of businesses were also considered as suitors for this buy-out.

Chinese media reports indicate that Digital China, which also partners Huawei in businesses such as cloud computing, plans to finance the bulk of the deal with bank loans. This will be joined by at least three investment firms backed by the government of financial and technology hub Shenzhen, with each owning 10 to 15%, reports the Chinese news agency.

Huawei’s rationale is reportedly an attempt to refocus its smartphone business on higher-end models currently supplied under its core brand. Although Huawei does not break down Honor sales from its annual reports, South China Morning Post had reported that the brand brought in more than $10 billion of revenue ever since 2015.

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Gizmochina has reported that Huawei had apparently been looking into selling its Honor unit as it has been facing various supply constraints due to US sanctions. It has lost its chip supply and having a budget-oriented line would put further strain on its already dwindling chip inventory as well, further reveals Gizmochina.

Honor devices are sold in China and across a range of international markets, aimed at youthful demographic and budget-conscious consumers. In addition to smartphones, the company sells a range of electronics including TVs, earbuds, and toothbrushes.

Last week, Honor in India, which recently released the Honor 10X Lite smartphone, officially expanded its fitness tracker range of devices by launching the Honor Band on Flipkart.

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