Huawei to sell 51pc stake in undersea cable business after US trade blacklist – South China Morning Post
What happened: Huawei’s parent company has signed a letter of intent to sell a majority stake in its international undersea telecoms arm, which builds underwater cables that support transnational internet connections.
The deal will see Hengtong Optic-Electric, a manufacturer of optical communication network products based in China’s eastern Jiangsu Province, take a 51% holding in Huawei Marine Technology.
According to Hengtong’s filing to the Shanghai Stock Exchange, however, the deal has not been finalized, and the size of the acquisition remains unspecified.
According to its website, Huawei Marine Technology has laid 50,000 kilometers of undersea internet cables across the world’s oceans, but accounts for a small part of Huawei’s overall business, making just $17 million in 2018, around 0.2% of the company’s total profits.
Why it’s important: Last month, the US Commerce Department added the Shenzhen-based telecoms giant to the ‘entity list‘, citing national security as its primary concern.