Honor Officially Sold by Huawei to Consortium of Agents and Dealers to Keep Supply Chain Active

In early November, it was reported that Huawei is in the final stages of selling its sub-brand Honor to a joint venture in China. The news is finally confirmed via a joint statement from over 30 agents and dealers of the Honor brand. Huawei has signed a deal with China’s Shenzhen Zhixin New Information Technology. According to the joint statement, the company was sold in a bid to keep the company alive after the US imposed sanctions restricting the business of Huawei and its companies. The new deal means that Honor is likely to resume its business in the US as Huawei will not hold any shares in the new Honor company after the sale.

Huawei confirms selling Honor to a consortium in China 

According to the statement released, Honor is being sold to a consortium of over 30 agents and dealers, which mainly includes government-backed entities like Shenzhen Smart City Development Group, China Telecom, etc. 

“Huawei’s consumer business has been under tremendous pressure as of late,” the Shenzhen-based company said in the statement, reported South China Morning Post. “This has been due to a persistent unavailability of technical elements needed for our mobile phone business,” it further added.

The companies stated that the acquisition is a market-driven investment to save Honor’s industry chain and that it is the best solution to protect the interests of consumers, channel sellers, suppliers, partners, and employees. 

Huawei will no longer hold any share in Honor. The change of ownership will not impact the company’s development direction, both statements said. 

The deal would allow Honor to deal with American companies for sourcing chips and processors, as the ban is only on Huawei and its enterprise group. Splitting completely from Huawei would mean the former sub-brand can take control of the business and also launch smartphones running on Android. 

Moreover, the deal also includes the entire employee base, research and development team, and the existing supply chain. This makes it a lot easier and faster for the new owners to bring the business back on track without having to start from scratch.

The final figure of the deal between Huawei and the consortium was not revealed in the statement. However, previous reports claimed that Honor was acquired for an approximate cost ranging between 100 billion Yuan, which roughly translates to USD 15.2 billion. 

Huawei launched Honor as a sub-brand in 2013. It has mainly been targeting the budget and mid-range segment of smartphone buyers, competing against the likes of Xiaomi, Oppo, Vivo, etc. Smartphones sold by the former Huawei sub-brand accounted for 14.6 million, or 26 per cent of the total 55.8 million smartphones shipped by Huawei in Q2 2020, according to a Canalys report.

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