Huawei ready to sell Honor for 3.1 billion

Negotiations with Digital China and other Chinese technology companies to sell the low-cost smartphone brand and avoid US sanctions

Passing by in front of a Huawei store in Beijing (photo Vcg / Vcg via Getty Images) The tech giant Chinese Huawei reorganizes and starts negotiations to sell its Honor smartphone brand. According to Reuters, the Shenzhen-based company is in contact with the company Digital China Group and other possible buyers to sell its specialized unit specifically on the younger market for about 25 billion yuan, the equivalent of 3.1 billion. euro.

The operation would be part of a general restructuring put in place by Hauwei to try to counter the effects caused by the restrictions and the ban imposed by Washington on its activities in the United States and in other markets. According to US President Donald Trump's ruling, American companies would be prevented from doing business with the Chinese company, which is thus cut off from the supply of essential components for the production of its devices.

Separating from Honor, and the related research and development and material procurement units, the low cost brand born in 2013 could therefore continue to develop its products without having to submit to the same restrictive conditions that have affected Huawei so far. Moreover, since last month the sanctions of the White House have led the Chinese company to end the production of its high-end chips due to difficulties in procuring materials.

The sale could therefore be a chance for Honor to relaunch, at least as regards the smartphone sector, in which the brand is worth about 26% of the total 55.8 million phones that Huawei sold in the second quarter of the year, according to the estimates of the research firm Canalys.

For its part, Digital China, which is among the most favored buyers, is already the main distributor of Honor smartphones, and already has assets a partnership with Huawei also in the cloud computing sector. In addition, it also deals with the supply of IT services of various kinds and was born as a spin-off of Legend Group in 2001.

It cannot be ruled out that other possible buyers such as the Chinese electronics manufacturer Tcl or the Xiaomi company, which according to data from the Statista website has now reached a market share of 10% in the global smart phone sector, may be interested in buying.