Huawei announces sale of subbrand Honor
"For now, the two companies have not released any information on the price of the deal. But reports suggest it could be in the region of $15 billion."
We've been hearing rumors about Huawei selling its budget phone brand, Honor, over the last few weeks and now the company has ended the speculation by making the news official. Faced with the difficult market and business conditions, Huawei appears to have been pushed into a corner and sell off its sister concern Honor to China-based Shenzhen Zhixin New Information Technology Co.
Announcing the news through a statement, the company said, "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... It is the best solution to protect the interests of Honor's consumers, employees, suppliers, and partners."
For now, the two companies have not released any information on the price of the deal. But even with no figures released, there have been reports in the past that have given us a hint at what the deal could have cost Honor's new owners. As per a previous report, the deal between Huawei and Shenzhen Zhixin New Information Technology could have been for around $15.2 billion.
As per the information shared, while Honor's current board and its workforce will stay in place, the new owners will oversee the business, branding, production, distribution, services, operations, and executive decisions, with Huawei, no longer holding any share in Honor the company. The company has also revealed that the deal will include all assets of Honor, including R&D, supply chain management, and other Honor assets, as well as Honor’s workforce of over 7,000 employees.
Over the last year or so, Honor had found it increasingly difficult to do business with the company having to deal with the impact of the sanctions placed on it and its parent company after the United States' government put it on the "Entity List". With Honor not part of Huawei's books, those restrictions could be eased on it going forward. For Huawei, the restrictions will remain in place, however, with Honor sold, the company could now focus on itself and create high-end smartphones and other products.
Source:indiatoday
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Swekshya Rajbhandari
