Huawei in talks to divest parts of Honor smartphone business, sources say

TCL Electronics Holdings

14/10/2020 05:52

By Julie Zhu
    HONG KONG, Oct 14 (Reuters) - Huawei Technologies Co Ltd is
in talks with Digital China Group Co Ltd  000034.SZ  and other
suitors to sell parts of its Honor smartphone unit in a deal
that could fetch up to 25 billion yuan ($3.7 billion), people
with knowledge of the matter said.
    Embattled Huawei is resetting its priorities in the face of
U.S. sanctions and will focus on its higher-end Huawei phones 
rather than the Honor brand which is aimed at young people and
the budget conscious, they said.
    The assets to be sold have yet to be finalised but could
include Honor's brand, research & development capabilities and
related supply chain management business, two of the people
said.
    The deal may be an all-cash sale and could end up smaller,
worth somewhere between 15 billion yuan and 25 billion yuan, one
of the people said.
    Digital China, the main distributor for Honor phones, has
emerged as the frontrunner but other prospective buyers include
Chinese electronics maker TCL and rival smartphone maker Xiaomi
Corp  1810.HK , the people said.
    The sources declined to be identified as the talks were
confidential.
    Huawei, Digital China and Xiaomi did not immediately respond
to requests for comment. TCL declined to comment. 
($1 = 6.7389 Chinese yuan)

 (Reporting by Julie Zhu in Hong Kong; Additional reporting by
David Kirton in Shenzhen; Editing by Sumeet Chatterjee and
Edwina Gibbs)
 ((julie.zhu1@thomsonreuters.com; +852 2843 6519; Reuters
Messaging: julie.zhu1.thomsonreuters.com@reuters.net))