Recently, Reuters officially confirmed that Huawei has agreed to sell the Honor brand to another corporation to save Honor’s smartphone business.
The company that acquires the Honor brand, Shenzen Zhixin New Information Technology, has just been established as a joint venture with an ownership structure belonging to the majority of businesses related to the Shenzhen city government, typically Xi. Shenzhen City technology development accounts for 98.6% of the shares. This transaction is estimated to be worth an estimated $ 15 billion.
Once the purchase is completed, Huawei will no longer hold any stake in the new Honor brand. The deal will cover everything from R&D, supply chain management and other Honor assets.
Since Huawei was included in the US “Black List,” the company has had difficulty running its smartphone business. The company adapted as best it could, but the challenge continues. Therefore, the Kirin 9000 in the Huawei Mate 40 series is expected to be the last high-end chip the company designs itself. In the future, Huawei may have to switch to 4G chips from rivals like Qualcomm or expect China’s semiconductor industry like MediaTek to thrive.
If Huawei seeks to become fully independent from American companies, it will need a lot of cash to make that happen. The Honor sale deal could be the cash Huawei needs for this effort. No transaction numbers have been disclosed, but an earlier report suggested it was in the $ 15.2 billion range. The previous report also stated that the group’s goal after buying Honor would be to make the company public within three years.