Huawei sells its sub-brand Honor for $15 billion
After a series of leaks, finally today, the official source says Huawei is ready to sell the Honor brand for $ 15 billion.
Specifically, according to sources from Reuters, Huawei is planning to sell its sub-brand Honor to a joint venture led by its distribution partner. This partner is none other than Digital China, which includes the funds behind the Shenzhen government, China. The value of the deal is estimated at 100 billion yuan, or about 15 billion USD.
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As we know Honor is a sub-brand of Huawei, founded by Huawei with the aim of distributing low-cost products without affecting Huawei’s brand value. However, due to the US government ban on Huawei, Honor itself was also affected significantly.
Previously, “fellow” Ming-Chi Kuo predicted that Huawei would be forced to sell the Honor brand in order to ease the burden in the situation of increasingly tense sanctions imposed by the US government on Huawei. straight. Although repeatedly denied this information, but as of today, perhaps Huawei has officially admitted that Honor is a “burden” that is difficult to maintain. The “liquidation” of this brand is said to be beneficial for both sides as Huawei has reduced its burden, while Honor has a chance to grow.
This deal is also a sign that Huawei does not have much expectation of a change in US attitude towards them – even if a new president may replace Trump in the future. far away.
The sale of Honor’s business includes most related assets, including brands, research and development, and supply chain governance. A source from Reuters said, Huawei may officially announce the deal next Sunday.
After this acquisition, Digital China will be the official distributor for Honor brand products, becoming one of the two largest shareholders of Honor Terminal with a nearly 15% stake.
According to Reuters, to be able to prepare to complete the purchase, Digital China had to rely on bank loans to buy Honor. There will be at least three financial investment firms involved in the deal, backed by the Shenzhen city government. Each party will own 10-15% of the shares of the new company.