Huawei Said to Sell Key Server Division Due to U.S. Blacklisting

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Huawei Technologies Co. is in advanced talks to sell its x86 server business after the U.S. blacklisting of the company made it difficult to secure processors from Intel Corp., the latest blow to the Chinese technology giant from American sanctions, according to people familiar with the matter.

The Shenzhen-based company is selling the server business to a consortium that includes at least one government-backed buyer, the people said, asking not to be identified because the negotiations aren’t public. The precise value of the deal couldn’t be learned, but it’s likely billions of yuan, they said.

Several potential buyers from government and the private sector emerged in recent months. Henan Information Industry Investment Co. Ltd., a Zhengzhou-based state-owned firm that has been a partner of Huawei’s server business, is a leading player, one of the people said. Consumer electronics maker Huaqin Technology Co. Ltd. and an asset management company representing the Hubei provincial government, are involved in the talks, the people said. It’s unclear if the companies are bidding separately or as part of the same consortium.

Huawei declined to comment. The potential buyers didn’t respond to requests for comment.
 
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