Zte Could Sell Its Smartphone Business For Over $5 Billion

ZTE has denied reports that it is planning to transfer its smartphone business into a new joint venture valued at approximately $5.6 billion.

The Chinese telecommunications company was reportedly negotiating with a major internet company and Shanghai state-owned investors to restructure its consumer smartphone operations.

However, ZTE rejected the claims on November 3, telling several Chinese news outlets that the reports were inaccurate.

According to The Paper, the company also said it reserved the right to take legal action over the publication and circulation of the claims.

What Was Reported About the $5.6 Billion Deal?

The original report claimed that ZTE was preparing to move its consumer smartphone operations into a jointly owned company involving three parties: ZTE, a major Chinese internet company, and Shanghai state-owned investors.

The proposed business was reportedly valued at approximately $5.6 billion.

The unnamed internet company was said to be considering an investment of around $1.1 billion.

According to the report, the final valuation, ownership percentages, and transaction structure had not been agreed upon.

Discussions allegedly began in April 2026 and gained momentum in July.

The parties were reportedly close to agreeing on a cooperation model by September, with an announcement originally planned for late October.

However, the reported announcement never took place.

The proposal was said to cover ZTE’s consumer smartphone operations in China and international markets, rather than the sale of the entire company.

RedMagic Was Reportedly Excluded From the Deal

The original report also claimed that ZTE’s RedMagic gaming smartphone business would remain outside the proposed joint venture.

This meant the transaction would primarily involve ZTE’s mainstream consumer smartphone operations.

Meanwhile, router products and home terminal devices were reportedly expected to return to the parent company’s direct management.

The proposed arrangement could have provided additional investment and operational support for ZTE’s smartphone business while allowing the parent company to focus on its other operations.

However, ZTE’s subsequent denial casts doubt on the reported restructuring and its proposed terms.

ZTE Had Already Established a Smartphone Subsidiary

The report also pointed to an existing ZTE subsidiary as a possible vehicle for the proposed restructuring.

In April 2025, ZTE established Shanghai Shenqi Jiyuan Intelligent Terminal Co., Ltd.

According to the company’s 2025 interim report, the subsidiary was wholly owned by ZTE.

Wang Xiyu was appointed chairman, while Ni Fei served as a director.

The original report claimed that employees from ZTE’s smartphone operations had already been transferred to the subsidiary.

However, the existence of the subsidiary does not establish that ZTE planned to sell or restructure its smartphone business through a new joint venture.

ZTE Rejects the Restructuring Claims

Following the publication of the report, several Chinese news organizations contacted ZTE for clarification.

On November 3, the company denied that it was negotiating the reported transaction.

ZTE told The Paper that the claims were seriously inconsistent with the facts and said it reserved the right to pursue legal action over the reports.

The company provided similar denials to Yicai and National Business Daily.

As a result, there is no confirmed agreement involving the reported $5.6 billion valuation or the proposed $1.1 billion investment.

The identity of the alleged internet company was never disclosed, and no official transaction terms were announced.

For now, ZTE has rejected the reports, and there is no confirmed plan to transfer its consumer smartphone operations into the proposed joint venture.

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