Huawei Technologies has canceled plans to sell a majority stake in its mobile products unit to private equity firms, a deal that was expected to fetch roughly $2 billion and would have made it among China's largest-ever private equity transactions.
The Shenzhen telecommunications company attributed the decision to unpredictable market conditions. “Given current global market conditions and prevailing economic uncertainty, the interests of the company are best served by postponing the sale process,” it said in a statement.
Bain Capital and Silver Lake Partners last week emerged as the remaining bidders that submitted formal offers, having edged out Kohlberg Kravis Roberts and Goldman Sachs.
Other global firms such as The Blackstone Group, Carlyle Group and TPG were also interested in acquiring a stake, but either did not submit bids in the first round or were rejected, the Financial Times reported in July.
Huawei had hired Morgan Stanley to run the auction for a 49 percent stake in its mobile unit, or possibly a larger stake if offered a premium. The handset unit’s value is estimated to be about $4 billion.
Hong Kong-based telecommunications group PCCW is also currently in the process of selling a 45 percent stake in its subsidiary HKT Group to private equity firms in a deal that could be worth more than $2.5 billion.
Huawei, Bain and Silver Lake did not respond to requests for comment by press time.