Chinese tech giant Huawei is selling its budget-price Honor smartphone brand in an effort to rescue the struggling business from damaging US sanctions imposed on its parent company.
The move announced Tuesday is aimed at reviving Honor by separating it from Huawei’s network equipment and other businesses, which Washington says are a security threat, an accusation Huawei denies.
They are under sanctions that block access to most US processor chips and other technology.
Huawei Technologies Ltd.’s announcement gave no financial details but said the company will have no ownership stake once the sale is completed.
Huawei will retain its flagship Huawei smartphone brand.
The buyer is a company formed by a technology enterprise owned by the government of the southern city of Shenzhen, where Huawei is headquartered, with a group of Honor retailers.
Earlier news reports on rumors of a possible sale put the price as high as 100 billion yuan ($15 billion).
Huawei, China’s first global tech brand, is at the center of US-Chinese tension over technology, security and spying.
American officials say Huawei might facilitate Chinese spying, which the company denies.
They also see Chinese government-supported technology development as a threat to US industrial dominance.
Sanctions imposed last year block Huawei’s access to most U.S. processor chips and other technology.
Those were tightened this year when the White House barred manufacturers worldwide from using US technology to produce chips for Huawei, including those designed by its own engineers.
Tuesday’s announcements gave no indication how Honor’s new owners planned to regain access to US chips and other technology including Google’s popular music, maps and other services.
Other Chinese smartphone brands such as Xiaomi, Oppo and Vivo operate without such restrictions.
Lillian Jijingi / Agency Report