Following the transaction, Avatr will own a 10 percent stake in Newcool, while Huawei retains 90 percent.
Avatr Technology, the electric vehicle (EV) brand backed by Changan Automobile, CATL, and Huawei, is set to acquire a 10 percent stake in Huawei’s component unit, Newcool. This marks the first external investment by Newcool.
Changan issued a stock exchange announcement today, detailing that Avatr and Huawei will sign an equity transfer agreement on August 20 in Chongqing. The transaction is valued at RMB 11.5 billion ($1.6 billion).
Post-transaction, Avatr’s share in Newcool will be 10 percent, with Huawei maintaining 90 percent ownership, according to Chongqing-based Changan.
This deal values Newcool at RMB 115 billion.
The announcement notes that the acquisition will strengthen Avatr’s strategic partnership with Huawei and Newcool, enabling Avatr to receive increased support from Huawei and accelerating Changan’s strategy to elevate its brand.
Changan aims to leverage this opportunity to deepen its strategic cooperation with Huawei and transform into a smart low-carbon mobility technology company.
Avatr plans to fund the share acquisition through its own cash reserves, with the transfer payment made in three installments.
Newcool’s board will consist of seven members, with Huawei entitled to nominate six and Avatr entitled to nominate one.
On November 25, 2023, Changan and Huawei signed an investment cooperation memorandum, agreeing to support the creation of a company providing intelligent automotive systems and components solutions.
Huawei planned to establish this target company, with Changan and its affiliates intending to acquire no more than a 40 percent stake, according to a previous stock exchange announcement.
The joint venture, tentatively named Newcool, was announced by Changan’s chairman Zhu Huarong on January 16.
Under the agreement, Huawei committed to not engaging in automotive manufacturing or operating the new company, as Zhu stated at the time.
Avatr was originally founded by Changan and Nio on July 10, 2018, with each holding a 50 percent stake. Since then, Nio has largely withdrawn from the company.
In late August 2021, Changan, CATL, and Huawei unveiled the updated Avatr brand, announcing their intention to develop EVs using a co-created CHN architecture, with C standing for Changan, H for Huawei, and N for CATL.
