Reuters news agency: Huawei will sell the Honor sub-brand for $15.2 billion


Reuters news agency: Huawei will sell the Honor sub-brand for $15.2 billion

Reuters news agency: Huawei will sell the Honor sub-brand for $15.2 billion

News unit EMGblog.com: According to Reuters news agency on Tuesday, November 10 This year (November 20, 2019), Huawei program Selling Honor business to the final stage supplied. According to informed sources, in this 100 billion yuan ($15.2 billion) deal, Honor will be transferred to a consortium led by Digital China (the main distributor of Honor products in China) and the local government of Shenzen. Of course, Reuters reported earlier in October that Huawei was negotiating with several companies to transfer the Honor sub-brand at a price of around 2.2 to 3.7 billion dollars reported, but according to people in the know, the contract figure is much higher than the initial estimates, and it will most likely be finalized in the coming days.

Huawei in the last two years It has faced the severe pressure of American sanctions. These sanctions not only target the sale of the company’s products in the United States, but since May this year, the company’s access to American suppliers of parts and chips needed to produce the fifth generation infrastructure and Huawei’s flagship phones, including the advanced P and Mate series smartphones Stopped. According to news sources, the transfer of Honor should be in line with the strategy He assessed the Chinese super company’s response to the pressure of sanctions. Apparently, the managers of the Chinese giant have decided to focus on the production of high-end products suitable for organizations by limiting the scope of the company’s business. In this deal, it seems that Huawei will sell almost all the assets related to Honor, including its brand ownership, research and development department and supply chain management. Although some sources have only talked about the sale of Honor’s smartphone division and have expressed doubts about other products of this collection. According to informed sources, Digital China Group will acquire nearly 15% of Honor Terminal’s shares in this transfer. will gain; A company that was established according to legal documents in April and is fully owned by Huawei is located. Digital China is also Huawei’s business partner in businesses such as cloud computing, and will pay for this contract through a bank loan. Of course, at least three other companies will be present in this consortium with the support of the local government of Shenzen, and each of them will take 10-15% of the shares.

Honor 30 Pro Plus

According to what we heard, after the handover, Honor seeks to keep its management team and most of its 7,000 employees and workers and offer its shares to the public within a three-year period. . Of course, Honor, Huawei, and the local government of Shenzen have not responded to Reuters’ request for more information, so it is not possible to fully confirm the authenticity of the unofficial rumors. Interestingly, the Digital China Group, which did not respond to this news agency’s request for comment on Tuesday, announced on Wednesday that it had not reached a joint agreement with Huawei regarding Honor until that day.

Honor is one of the brands which has been pursuing the development of its business by turning to the production of phones that have the ability to become control tools for devices connected to the Internet, such as smart home appliances. This brand was founded by Huawei in 2013, but until now most of its business and production processes have been carried out independently. Honor sells its smartphones through websites and independent retailers in China. In this way, companies such as Xiaomi, Oppo and Vivo are the main competitors of this brand in the segment of cheap products. In addition to the Chinese market, Honor also sells its products in Southeast Asia and Europe. According to estimates by Canalys, this brand accounted for 26% of the total 51.7 million Huawei smartphones sold in the July to September quarter of this year. Of course, Honor brand products are not limited to smartphones and include other categories such as laptops, tablets, computers and smart TVs.

Although the finalization of the sale of Honor shows that the big management change in the United States, following the recent elections, will not change much in the eyes of Huawei’s decision-makers in the American government’s procedure and the lifting of sanctions, but With an optimistic view, handing over this brand to new investors could mean its removal from the list of US sanctions against Huawei. As you know, Huawei currently does not have the possibility to use advanced and updated American chips, or chipsets produced with American technologies, and the parts designed by the company itself cannot be manufactured in factories equipped with American technology such as TSMC. Therefore, company managers are trying to get help from other manufacturers such as Mediatek. Recently, there have been rumors about obtaining a license to sell parts to Huawei by Qualcomm. But we cannot speak with certainty about the realization of this cooperation.

According to unofficial reports, Qualcomm will be able to meet Huawei’s demand only when the burden of the Honor sub-brand is removed from the shoulders of the Chinese company, because the American company is currently looking to add one of the world’s largest smartphone manufacturers to its supply list. It does not have the required capacity.

Now with the certainty of finding the sale of Honor, Qualcomm is one step closer to meeting Huawei’s needs. Of course, provided that, as an American company, it can receive the necessary permits from the United States government. Something that, at least until the writing of this news, there is no credible sign of it among the media and unofficial news.

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