A month after denying the sale of Honor, followed by a report of Huawei finalizing a buyer for its sub-brand, today Huawei finally announced the sale of its subsidiary Honor.
With the US administration declaring Huawei as a potential risk, it was getting tough for the company and its subsidiaries to deal with US tech giants such as Google and Qualcomm, which blocked, its access to Android and Snapdragon chipsets, hurting Huawei’s business a lot.
Shenzhen Zhixin New Information Technology Co. Ltd, the new owner of Honor issued a joint press statement with Huawei Investment & Holding Co. Ltd, that both the companies have signed the agreement to completely acquire the Honor brand for an undisclosed amount. Huawei Investment & Holding Co. Ltd won’t be having any shares and there won’t be any participation from Huawei in the executive decisions. Both the companies imply that the change in ownership won’t be affecting the brand’s direction and the senior management will remain the same.
Honor cuts its ties with Huawei to ‘to ensure its own survival‘
The press statement from Huawei reads:
“At a difficult time when industrial technology elements are not sustainable and consumer business is under great pressure, in order to allow the glory channel and suppliers to continue, Huawei Investment Holdings Co., Ltd. decided to sell Honor business assets as a whole, acquired by Shenzhen Zhixin New Information Technology Co., Ltd. Huawei does not own any shares in the glory after delivery, nor does it participate in operation, management and decision-making.”.
Shenzhen Zhixin New Information Technology Co. Ltd is a government-backed technology consortium of 40 agents and distributors, based in the south of Shenzen. Reports have indicated that the deal has been closed for $15 billion (100 billion yuan).
The change in ownership will enable Honor to restore access to the US-based companies including Google and Qualcomm, and it might reinstate Honor as an independent brand like other Chinese firms Xiaomi, Oppo, Vivo, and OnePlus which are operating in the US without any restrictions.