Huawei opened talks with several companies regarding a sale of assets related to its youth-focused device range Honor, Reuters reported, with the brand itself, R&D facilities and supply chain management all potentially on the block.
The news outlet’s sources named existing Honor distributor Digital China Group as among the players in talks about buying the assets, with rival suitors potentially including fellow device makers Xiaomi and one of TCL Communication’s group of businesses.
Depending on the make-up of the final deal, it could be worth between CNY15 billion ($2.2 billion) and CNY25 billion.
Huawei’s rationale is reportedly an attempt to refocus its smartphone business on higher-end models [1] currently supplied under its core brand.
Were Honor to be under new ownership it would also likely fall outside of a ban on sourcing some components [2] currently being imposed on Huawei by the US, though if another Chinese company was the buyer it could still find itself caught-up in the ongoing technology trade war [3].
Honor devices are sold in China and across a range of international markets, aimed at a youthful demographic and budget-conscious consumers. In addition to smartphones, the company sells a range of electronics [4] including TVs, ear buds and toothbrushes.
Although Huawei does not break down Honor sales from its annual reports, South China Morning Post last week reported the brand brought in more than $10 billion of revenue since 2015.
[1] https://www.mobileworldlive.com/devices/news-devices/huawei-makes-a-mate-date
[2] https://www.mobileworldlive.com/featured-content/home-banner/huawei-chair-tackles-us-onslaught
[3] https://www.mobileworldlive.com/asia/asia-news/smic-warns-of-material-impact-from-us-sanctions
[4] https://www.mobileworldlive.com/devices/news-devices/honor-boosts-processing-power-in-9x-pro
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