Reuters: Huawei is in talks to sell its Honor division

According to a Reuters source, Huawei Technologies is in talks with Digital China Group and others to sell part of the Honor brand in a deal worth up to $ 3.7 billion.

Those sources say that due to sanctions from the US, Huawei is rearranging its priorities and will focus on high-end Huawei-branded phones rather than Honor brand. young users and cheap equipment.

Assets for sale are not yet finalized but most likely include the Honor brand, research and development department, and supply chain management related to business operations.

The deal could end with a smaller cash payment, ranging from $ 2.2 billion to $ 3.7 billion, a source said.

Digital China is currently the main distributor for Honor phones, and is thus emerging as the most potential buyer of its competitors, including electronics maker TCL and Xiaomi.

The Honor brand was founded by Huawei in 2013, but its business is relatively independent from the parent company. Honor competes with Xiaomi, Oppo and Vivo in the low-cost segment, and their phones are also sold in China, Southeast Asia and Europe.

A few days ago, Kuo Ming-Chi, an analyst at TF International Securities, once thought that Huawei would sell the Honor brand and it would be a win-win deal for all parties, including the Honor brand, home. their supply and the Chinese electronics industry. Because when it is independent from Huawei, Honor can escape US sanctions and continue to survive when it comes to having parts for production again.

The low-cost phone market is where competition is fierce with fragile profits. Last year, Honor brought in revenue from $ 10.3 billion to $ 11.8 billion, but only made a profit of more than $ 740 million (about 7%), a Reuters source said.

Refer to Reuters