Huawei is planning on selling its budget smartphone brand unit Honor for a 100 billion Yuan (roughly 15.2 billion US Dollars) deal which will include the Digital China Group, and the local government of the brand’s home town, Shenzhen.
A new report from Reuters has arrived, stating that the company is planning to sell a large number of its sub-brands to local governments and other agencies. For those who don’t know, Huawei has obviously been considering selling its honor division because it faces various supply restrictions due to US sanctions. It has already lost chip supply, and having a budget-oriented production line will put further pressure on the chip inventory that is already decreasing.
The report was also issued on the occasion of the rotating US presidency. Although, Huawei obviously does not want any policy that is conducive to its position to be changed. In other words, even though Joe Biden has taken over the safety hazard accusation, the accusation may continue. It is said that this transaction is “all cash” and will include almost all assets, brands, research and development capabilities, and even supply chain management.
Although the news has not been officially announced, the source believes that the company may release the news before Sunday (November 15, 2020). According to sources, Digital China Group will be one of the two largest shareholders of Glory, and will own nearly 15% of Glory Terminal Co., Ltd., which was previously wholly owned by Huawei. The transaction will enable Digital China to provide most of the funds for the transaction through bank loans, and will also be supplemented by at least three investment companies supported by the Shenzhen government, the financial technology center. These companies will each hold approximately 10% to 15% of the shares.
After the transaction is completed, Honor still plans to retain most of its management and more than 7,000 employees and employees. In addition, according to sources, it plans to go public in the next three years. At present, Honor declined to comment on this matter, while Huawei, Digital China and the Shenzhen government have not yet responded to this matter.