Beijing (PingWest)—Chinese telecommunication giant Huawei plans to sell budget-brand smartphone unit Honor for 100 billion yuan ($15.2 billion) to a consortium led by Digital China and the Shenzhen government, Yicai.com reported, citing people familiar with the matter.
The all-cash sale will include almost all assets including brand, research & development capabilities, and supply chain management, said the report.
According to Reuters' exclusive report, Digital China, a major Honor distributor, will become a top-two shareholder of sold-off entity Honor Terminal with a near 15% stake.
The distributor plans to finance the bulk of the deal with bank loans. It will be joined by at least three investment firms backed by the government of financial and technology hub Shenzhen, with each owning 10% to 15%, Reuters said, citing people familiar with the matter.
After the sale, Honor plans to retain most of its management team and 7,000-plus workforce and go public within three years.
Honor was established by Huawei in 2013 but the business mostly operates independently. The spin-off of the smartphone business may mean that Honor is no longer subject to Huawei’s US sanctions.
The Trump administration last year prevented most American companies from doing business with Huawei due to national security considerations, even though the Chinese company has repeatedly denied being a security risk.
Honor-brand smartphones made up 26% of the 51.7 million handsets Huawei shipped in July-September, estimates from Canalys showed. Honor’s products also include laptops, tablet computers, smart TVs and electronic accessories.