Huawei plans to sell smartphone unit Honor to a consortium of buyers in an effort to ensure its survival amid crippling US sanctions, according to a statement published late on Monday.
“The acquisition represents a market-driven investment made to save Honor’s industry chain,” Huawei said in a joint statement released with a group of more than 30 Chinese dealers and agents.
“It is the best solution to protect the interests of Honor’s consumers, channel-sellers, suppliers, partners, and employees.”
The sale announcement comes as Huawei’s consumer business scrambles to stay afloat following tougher sanctions leveled by the Trump administrations on the Chinese telecom giant, including measures thatTerms of the deal weren’t disclosed, but a Reuters report published earlier this month said the deal could fetch more than $15 billion.
“Once the sale is complete, Huawei will not hold any shares in the new Honor company,” the company said in the statement.
Honor is Huawei’s budget sub-brand that sells low-cost smartphones to younger consumers within its native China as well as overseas including Europe and South East Asia. The 7-year-old company ships 70 million phones annually, according to the statement.
Earlier this year, Richard Yu, Huawei’s consumer division head, said the company will no longer be able to equip its premium phones with its cutting-edge Kirin processors, which the company has described as the most powerful chip. Honor products often depend on Huawei’s technology and some Honor phones run on Huawei’s Kirin chipsets.
“Huawei’s consumer business has been under tremendous pressure as of late,” the company said in the statement. “This has been due to a persistent unavailability of technical elements needed for our mobile phone business.”
“This move has been made by Honor’s industry chain to ensure its own survival,” Huawei said.