Following last week’s report that a deal was imminent, Huawei announced the sale of its budget mobile brand Honor. Saying that the company ships over 70 million units annually, Huawei explains its reasoning for the sale as a way for Honor’s suppliers and dealers to survive despite the sanctions issued against Huawei by the US and other countries.
With politicians declaring the company risk, they’ve blocked its access to chip suppliers and US companies like Google. Now Huawei “will not hold any shares or be involved in any business management or decision-making activities in the new Honor company,” although it’s unclear whether that will be enough to reconnect its business relationships.
There’s no mention of the financial details of the sale that had been rumored to cost about $15 billion, but Honor is being acquired by Shenzhen Zhixin New Information Technology Co., Ltd., which the Associated Press reports is “a technology enterprise owned by the government of the southern city of Shenzhen.” That’s where Huawei’s headquarters are located, as well as a number of Honor retailers.