Over the past year, US restrictions have severely limited and adversely affected Huawei’s telecom consumer and commercial businesses. In the wake of the situation, the Chinese Smartphone maker was reportedly considering selling off its subsidiary Honor.
Reports regarding the news have been surfacing on the internet for a while, however, nothing was official. Until now.
The company has announced,
At a difficult time when industrial technology elements are unsustainable, and consumer businesses are under tremendous pressure, in order to allow Honor channels and suppliers to continue, Huawei Investment Holding Co., Ltd. decided to sell the entire Honor business assets. The purchaser is Shenzhen Zhixin, New Information Technology.
Huawei has signed an agreement with Shenzhen Zhixin New Information Technology Co., Ltd. The company will fully acquire Honor, its employees, and its business. According to reports, the acquisition will protect the interests of consumers, channels, suppliers, partners, and employees. Changes in ownership will not affect the direction of Honor’s development, and Honor’s senior management will remain on board. Huawei will no longer hold any share in Honor, nor will it be a part of the company’s executive board any longer.
As far as the purchasing company, Shenzhen Zhixin New Information Technology Co., Ltd. is concerned, it was established by a consortium of more than 30 agents and distributors. It has been reported that Shenzhen Smart City Development Group, which is a subsidiary of Shenzhen SASAC, holds 98.6% of the shares, while the Shenzhen state-owned Assets Cooperative Development Private Equity Partnership holds 1.4% of the shares.
The decision to sell the Honor comes at a time when US sanctions have crippled its parent company. Under its new ownership, Honor might be able to bypass the sanctions to do business with companies based in the US.