Huawei Technologies Co. Ltd. will divest its stake in undersea telecom cable business Huawei Marine Systems Co. Ltd., Reuters reported, citing a stock exchange filing.
Established in 2008, Huawei Marine is a joint venture of Huawei and the U.K.'s Global Marine. The undersea cable company has built 50,361 kilometers of cables, including a cable linking Africa and South America.
Taking over Huawei's shares is Hengtong Optic-Electric Co. Ltd., which agreed to buy Huawei's 51% stake in Huawei Marine Systems through cash and share issuance. Based in China, Hengtong Optic manufactures optical telecommunication network products.
The deal is Huawei's first major asset sale since the U.S. blacklisted the Chinese company, the report said.
Meanwhile, Huawei established a new department that will work on smart car solutions for vehicle manufacturers. It will offer mobility solutions including IT equipment and applications. The company appointed Wang Jun, who previously served in Huawei Japan's carrier business subsidiary, as the president of the newly established unit, according to Pandaily.
The stake sale, along with the creation of a new department, comes as Huawei's main telecom network equipment business is under global scrutiny following the U.S. government's decision to persuade other countries to ban the use of Huawei gear due to security risks.