Huawei has pulled the trigger on the sale of its sub-brand Honor. The rumours that Huawei could sell off its subsidiary to continue operations without the sanctions have been doing the rounds for around a month now.Chinese media outlets claim that a deal has been reached with a newly-established, state-owned joint venture and is currently in its final stages. The official announcement could be made on November 20.
According to sources, Huawei has sold Honor smartphone unit to a newly established state-owned JV, aiming for an IPO in 3 years.
The prerequisites of the acquisition is that the new company can buy and use 5G chips. An official announcement of the deal will be made around Nov 20. pic.twitter.com/KipBu3SotR
— Eva 郑 عائشة (@evazhengll) November 8, 2020
While the acquisition cost hasn’t been mentioned, TechRadar estimates it to be in the range of Yuan 15 to 25 billion, which is approximately USD 2.2 billion to USD 3.7 billion. Based on the report, the newly-established JV is also aiming for an IPO in three years. The report also states that the deal was made with the prerequisite that the new company can once again source and use 5G chips.
This will allow Honor phones to use Snapdragon chipsets and have access to Android with all of Google’s Mobile Services onboard since the current US sanctions are levied on Huawei Consumer Business Group and Huawei Enterprise.The deal is also said to include the entire Honor operation, including its employee base, research and development, and related supply chain. This will ensure that a new company will not have to start from scratch. The acquisition will also help Huawei to focus on the premium segment and telecom equipment.