Daily Management Review

Huawei to sell Honor for $ 15.2B to dodge US sanctions


The deal, which will allow Honor to be exempted from American sanctions, is scheduled to be announced on 15 November.

Chinese company Huawei is preparing to sell its mobile and computer equipment business under the Honor brand. Negotiations for the purchase of Honor are under way with a consortium of investors led by the Digital China Group's distributor of smartphones and the government of the Chinese city of Shenzhen. 

The deal is valued at 100 billion yuan ($15.2 billion) and will allow Honor to be exempted from US sanctions against Huawei, Reuters reports citing sources familiar with the negotiations. 

According to the agency's interlocutors, Huawei intends to announce the deal on November 15. In 2019, the U.S. authorities imposed sanctions against Huawei because of the suspicion of transferring data to the Chinese authorities. 

Because of these sanctions, the company cannot buy chips that use US patents or technology. The Chinese company denies the charges against it and the deal will allow it to remove Honor from the sanctions. 

Sources told Reuters that Digital China will receive about 15% of the company's shares and three unnamed investment companies with 10-15% each. Upon completion of the deal, Honor Terminal plans to retain most of its management and staff (more than 7,000 people). 

Digital China is the main distributor of Honor products in China and a partner of Huawei in other areas. Behind the unnamed investment companies, according to the agency, are the authorities in Shenzhen (Guangdong Province), where Huawei's headquarters are located.

source: reuters.com