Huawei has finalised the sale of the Honor business

In its annual report, Huawei announced the completion of the sale of the Honor business. A supplementary agreement with the buyer of Honor was signed in 2023 and Huawei has fulfilled all its contractual rights and obligations related to this agreement. The report confirms that Huawei has sold its Honor business and server-related subsidiaries.

Here's What We Know

The sale of the business is in instalments, but the final sale amount is unknown. Financial instruments related to the sales were measured at fair value rather than market price. The report highlights that the change in the fair value of financial instruments resulting from the sale of subsidiaries and businesses in 2023 was a significant amount of RMB 55.853 billion.

In November 2020, Shenzhen Zhixin New Information Technology Co., Ltd. completed the comprehensive acquisition of business assets related to the Honor brand. This acquisition, jointly invested and established by Shenzhen Smart City Technology Development Group and more than 30 Honor agents and distributors resulted in Huawei divesting its shares in the new Honor company.

In the process of selling its business, Huawei recognised the challenges faced by its subsidiary brand Honor in maintaining access to key components amid pressure from the US. By spinning off Honor into an independent company, Huawei hoped to circumvent restrictions imposed by the US government on its global suppliers. The strategic move was aimed at ensuring the independence of Honor's operations and guaranteeing the brand's access to vital supplies despite US sanctions and restrictions.

Source: Gizmochina