HUAWEI SELLING HONOR PHONE BRAND IN FACE OF US SANCTIONS

Chinese tech giant Huawei is selling its budget-price Honor smartphone brand in an effort to rescue the struggling business from damaging U.S. sanctions imposed on its parent company.

The sale announced Tuesday is aimed at reviving Honor by separating it from Huawei’s network equipment business, which Washington says is a security threat, an accusation Huawei denies. It is under sanctions that block access to most U.S. 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 state-owned company in Shenzhen, the southern city where Huawei is headquartered, and 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).

“The move has been made by Honor’s industry chain to ensure its own survival,” said the Huawei statement. The buyers said in a separate statement the split was “the best solution” to protect customers and employees.

Huawei, China’s first global tech brand and the biggest maker of switching equipment used by phone and internet companies, is at the center of U.S.-Chinese tension over technology, security and spying. The feud has spread to include the popular Chinese-owned video app TikTok and messaging service WeChat.

Economists and political analysts expect little change in U.S. policy toward China under President-elect Joe Biden due to widespread frustration with Beijing over trade and technology.