Huawei’s new smart car firm valued up to $35 bil.

HONG KONG/SHANGHAI (Reuters) — Huawei Technologies’ new smart car software and components firm is set for a valuation of up to 250 billion yuan ($34.67 billion) after it sells stakes to investors including Changan Auto, three people with knowledge of the matter said.

The Chinese company said on Sunday it will spin off its four-yearold Intelligent Automotive Solution (IAS) business unit — which aimed to become the equivalent of German automotive supplier Bosch of the intelligent electric vehicle (EV) era — into a new company which will receive the unit’s core technologies and resources.

Main auto partner Chongqing Changan Automobile and relevant parties will own up to 40 percent of the new firm, a Changan Auto statement showed on Sunday. Neither Changan Auto nor Huawei disclosed financial details.

Changan Auto and its ultimate parent, state-owned China Ordnance Equipment Group — also known as China South Industries Group — are considering acquiring about 35 percent and 5 percent respectively of the new firm, which could be valued at 200 billion to 250 billion yuan, two of the people said.

Potential minority shareholders include state-owned automakers FAW Group and Dongfeng Motor Group, which are also in advanced talks with Huawei to acquire up to 5 percent each, said the three people.

Huawei will likely remain the single largest shareholder with 40 percent to 50 percent for at least the next two-to-three years, said two of the people.

Deal details — notably the ownership split and valuation — have not been finalised and are subject to change, the three people said. The transaction will also be subject to regulatory approval, said one of the people as well as a fourth person with knowledge of the matter.

The people declined to be identified as the matter is private. Changan Auto referred Reuters to its Sunday statement and declined to comment further.

Huawei confirmed it is in advanced talks to sell part of its new smart car firm to a number of investors including Chongqing Changan Automobile, but did not comment on the valuation.