HONG KONG—China’s Huawei Technologies Co. moved to shore up its U.S.-sanctions-damaged business by selling budget smartphone brand Honor to a state-led consortium.
The Chinese telecom company said Tuesday that it would sell Honor to a new company that records show is majority owned by a unit of the government of Shenzhen, the southern Chinese city where Huawei is based. More than three dozen other Chinese entities, including state-owned companies and dealers of Honor devices, also have an unspecified stake in the consortium.
The companies didn’t disclose the value of the sale or how it would be financed, but Chinese media reports before the deal’s announcement placed its value at about $15 billion.
The deal is in response to “tremendous pressure” on its consumer business from component shortages caused by U.S. curbs on its supply chain, Huawei said. Unloading Honor could enable the unit to sidestep restrictions from the Trump administration that block Huawei from buying computing chips or other parts made using American technology.
Huawei executives have described the company as fighting for survival following the U.S. actions. It has been drawing on inventory stockpiles to build its smartphones and telecom equipment since it became unable to buy virtually any chips in mid-September. Executives have said its smartphone business, which requires vastly more chips than other business lines, faces the most urgent shortfall.
