The global technology giant Huawei Technologies is reportedly in talks to sell approximately 40% of its shares in a newly established smart car software and parts company. Valued at a staggering 250 billion yuan (35.09 billion USD), the initiative aims to attract investments from key players in the automotive industry.
Three sources familiar with the matter revealed that Huawei’s smart car venture is set to sell shares to investors, with Changan Automobile being a prominent participant. The valuation of the shares is expected to reach as high as 250 billion yuan (35.09 billion USD). The development follows the signing of an “Investment Cooperation Memorandum” between Changan Automobile and Huawei Technologies.
As part of the strategic cooperation, Changan Automobile and its parent company, China Ordnance Equipment Group Co., Ltd. (also known as China Southern Industries Group Co., Ltd.), are contemplating acquiring around 35% and 5% of the new company, respectively. The acquisition amount of Changan and its parent company will reach 80-100 billion yuan (11.2-14.0 billion USD).
Furthermore, other major players in the automotive sector, including FAW Group and Dongfeng Motor Group, are reportedly in advanced discussions with Huawei to secure minority stakes of up to 5% each in the new venture.
While Huawei is considering selling a substantial portion of its shares, it is anticipated to retain the position of the largest single shareholder for at least the next two to three years. Huawei’s stake is expected to be in the range of 40% to 50%.
It’s crucial to note that the finer details of the deal, such as the specific stake distribution and valuation, have not been finalized and are subject to change. Additionally, the deal will be subject to regulatory approval, ensuring compliance with industry regulations.
The sources providing this information opted to remain anonymous, and both Changan Automobile and Huawei declined to provide further comments or details.
