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Explainer | Huawei sells Honor to ensure budget smartphone brand’s survival amid US sanctions
- Huawei has sold its Honor budget smartphone business to a consortium of over 30 agents and dealers called Shenzhen Zhixin New Information Technology
- The Chinese telecoms giant will not hold any shares or be involved in Honor’s future business management or decision-making activities after its sale, it says
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Huawei Technologies has sold its Honor budget smartphone business to a consortium of over 30 agents and dealers, according to a statement released on Tuesday morning on its official website.
The Chinese telecommunications giant will not hold any shares or be involved in any business management or decision-making activities in the new Honor company after its sale to the consortium, Shenzhen Zhixin New Information Technology, according to the statement.
The deal comes after the US imposed tighter restrictions on Huawei in May this year, restricting its access to Huawei’s acquisition of chips made with American software and technology, even from companies outside the US.
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“Huawei’s consumer business has been under tremendous pressure as of late,” the Shenzhen-based company said in the statement. “This has been due to a persistent unavailability of technical elements needed for our mobile phone business.”
Huawei said the sale will help Honor’s channel sellers and suppliers “make it through this difficult time” and the move was made by Honor’s industry chain to “ensure its own survival”.
The statement did not disclose the sale price, although Chinese news site Huxiu reported that the deal was worth US$40 billion, while Reuters reported last week that it was worth US$15.1 billion.
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