Huawei feeling the heat as it eyes Honor sale


(Reuters) – Huawei Technologies [HWT.UL] plans to sell its budget-brand Honor smartphone unit in a 100 billion yuan ($15.14 billion) deal after years of pressure from U.S. trade curbs made on grounds that the technology firm is a national security threat.

The world’s biggest maker of mobile telecommunications equipment has repeatedly denied the accusation, but in May this year its rotating chairman acknowledged it was in survival mode.

The all-cash sale will include almost all of Honor’s assets including brand, research & development capabilities and supply chain management, sources told Reuters.

Divestment will mean Honor is no longer subject to Huawei’s U.S. sanctions, analysts said.

The following is a timeline of Huawei’s struggles with U.S. authorities that led to this point:

October 2012 – An 18-month, White House-ordered review of Huawei and ZTE Corp finds no clear evidence Huawei spied for China, though it warned of vulnerabilities hackers could exploit. The review came amid broader concerns about Chinese spying capabilities.

December 2013 – Honor becomes a Huawei sub brand.

December 2017 – Members of the U.S. Senate and House intelligence committees send a letter to the U.S. Federal Communications Commission (FCC) to raise concerns about carrier AT&T Inc’s plans to sell Huawei smartphones.

January 2018 – Huawei’s deal with U.S. carrier AT&T Inc to sell its smartphones in the United States collapses.

April 2018 – Reuters reports that U.S. prosecutors in New York have been investigating whether Huawei violated U.S. sanctions in relation to Iran.

August 2018 – Australia bans Huawei from supplying equipment for its 5G mobile network citing national security risks.

December 2018 – Canadian police arrest Meng Wangzhou in Vancouver as she changes planes, as the U.S. attempts to have her extradited on charges she covered up efforts by Huawei-related companies to sell equipment to Iran, breaking U.S. sanctions against the country.

May 2019 – The U.S. Commerce Department adds Huawei Technologies Co Ltd and 70 affiliates to the ‘Entity List,’ banning it from buying parts and components from U.S. companies without U.S. government approval.

May 2019 – The U.S. Commerce Department grants Huawei a licence to buy U.S. goods until Aug. 19 to maintain existing telecoms networks and provide software updates to Huawei smartphones.

September 2019 – Huawei accuses the U.S. government of instructing law enforcement to “coerce” and “entice” its employees to turn against it.

January 2020 – The European Union said countries can either restrict or exclude high-risk 5G vendors from core parts of their telecoms networks, a move targeting Huawei but falling short of a U.S. call for a complete ban.

May 2020 – The U.S. Commerce Department expands U.S. authority to require licences for sales to Huawei of semiconductors made abroad with U.S. technology, vastly extending its reach to halt sales to the company.

July 2020 – the UK government says it will ban Huawei from Britain’s 5G network by ordering telecoms companies to remove its equipment by 2027.

August 2020 – Richard Yu, CEO of Huawei’s Consumer Business Unit, says that from Sept. 15 the company will not be able to produce its flagship Kirin processors, which power its high-end smartphones, due to the U.S. curbs.

September 2020 – Reuters reports that Germany plans tougher oversight and asssessments of telecom network vendors, stopping short of an outright ban of Huawei.

October 2020 – The British parliament’s defence committee said that it had found clear evidence that telecoms giant Huawei had colluded with the Chinese state and that Britain may need to remove all Huawei equipment earlier than planned.

October 14, 2020 – Reuters reveals that Huawei is in talks with Digital China Group and other suitors to sell parts of its Honor smartphone unit.

Reporting by David Kirton; Editing by Jacqueline Wong


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