Huawei Investment and Holding Co., Ltd. announced that it has decided to sell all of its Honor business assets to Shenzhen Zhixin New Information Technology Co, Ltd. According to Huawei, this sale will help Honor’s channel sellers and suppliers make it through this difficult time.
Reuters reported that Honor is a budget brand smartphone unit of Huawei. It is being sold to a consortium of over 30 agents and dealers, according to a joint statement signed by 40 companies involved in the purchase.
Huawei will not hold any shares in the new Honor company after the sale, according to the statement, with the buyers setting up a new company, Shenzhen Zhixin New Information Technology, to make the purchase, the statement said.
Reuters also reported that sources with knowledge of the matter said that the U.S. government will have no reason to apply sanctions to Honor after it separates from Huawei.
Forbes reported that Honor made a name for itself by selling cheap smartphones. It also has a range of other low-budget equipment including laptops and routers that, Forbes reported, Honor “is currently banned from selling in the U.S.”
The Forbes article includes statements from Chief of Research at CCS Insight, Ben Wood. He pointed out that the deal has been confirmed, but has yet to be completed. He expects that Huawei will wait until after the U.S. administration transition in January happens before the consortium that will purchase Honor will attempt to re-engage with suppliers.
To me, it appears that Huawei hopes that by selling its Honor brand that incoming U.S. President Biden will choose to overturn current President Trump’s executive order that affected Huawei. The order blocked Chinese telecommunications companies from selling equipment made in the United States.