Huawei announced on Tuesday its plans to sell Honor worth a $15 billion, to a consortium led by the Shenzhen government and IT service supplier Digital China, according to Reuters report.
Previous reports suggested that the deal will offload its Honor assets including brand ownership, R&D and supply chain management. Several investment firms are also expected to join in on the deal.
Also, the main reasoning behind the deal is to circumvent the multiple trade bans enforced by the US government. Moreover, Honor plans to retain most of its management team and 7,000 workforce, according to the report.
On other hand, main Honor distributor Digital China Group Co Ltd will become a top-two shareholder of sold-off entity Honor Terminal Co Ltd with a near-15% stake. In addition, Honor Terminal was combined in April and is fully owned by Huawei.
Notewortht, the Digital China Shares hit the maximum upper trading limit of 10% at $4.80 on Tuesday, after Reuters reported Huawei’s Honor sale plan.
Later, Sweden announced on October, that it banned equipment from Chinese telecommunication firms Huawei and ZTE from its new 5G network, joining other European nations that have restricted the role of Chinese suppliers.
According to the Swedish Post and Telecom Authority (PTS), the setting of the licence conditions followed assessments by the Swedish Armed Forces and security service, which called China one of the biggest threats against Sweden.
Also, Huawei and ZTE equipment already installed will have to be removed by 1 January 2025, PTS reported. The new installations in the central functions for the radio use of the frequency bands must be carried out without Huawei or ZTE suppliers, the Swedish authority reported in a press release
Noteworthy, on May 2019 the US Commerce Department banned sales of US apps and hardware to Huawei, including Facebook, Whatsapp, Instagram, and Booking. The department accused Huawei of undermining US national security and foreign interests.
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