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Chinese tech group Huawei will sell its low-cost mobile phone brand Honor in an effort to salvage the business from sanctions and blockades imposed by the United States, the company said on Tuesday.
The measure aims to revive Honor by separating it from Huawei’s network team, a company that Washington accuses of being at the service of Chinese espionage, an accusation that Huawei denies.
The group is subject to sanctions that block access to American technology, including components and programs essential for the manufacture and operation of mobile phones, including ‘chips’, semiconductors or Google services.
Huawei Technologies Ltd.’s announcement does not include financial details, but said the company will no longer have a stake in Honor once the deal is consummated.
Huawei will keep its flagship brand of mobile phones, with the same name as the group.
The buyer is a company formed jointly by a technology company owned by the government of the city of Shenzhen, in the south of the country, where Huawei is based, and a group of Honor retailers.
Previous news of a possible sale puts the value of the deal at 100 billion yuan (12.6 billion euros).
“The measure was made to ensure the survival” of Honor, Huawei said in a statement.
The Chinese group is China’s first global tech brand, but it is at the center of tension between Beijing and Washington over technology, security and espionage.
The government of Donald Trump has been pressuring his allies, including Portugal, to exclude Huawei and other providers from their telecommunications networks..
Honor, founded in 2013, is one of the best-selling mobile phone brands in the world.
Total shipments of Huawei and Honor terminals fell 5%, compared to the previous year, in the quarter ended in June, to 55.8 million units, according to consultancy Canalys.
Sales in China increased 8%, but sales abroad fell 27%. Huawei’s mobile phone sales outside of China suffered because the company is unable to pre-install Google services due to US sanctions.
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