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The credit crisis has claimed another wireless victim, the deal to sell a major stake in Huawei's mobile phones unit. The Chinese vendor cancelled the auction after receiving only two final bids, both significantly less than the value it had targeted.

Huawei has been looking to sell about 50% of its devices operation to raise money for international expansion, particularly in north America. Although there was a flurry of initial interest in what would have been the largest private equity deal by a Chinese company, only two of the shortlisted bidders - groups led by Bain Capital Partners and Silver Lake - followed through with firm bids last week, and neither offered anything like the $4bn Huawei had hoped for. In the first round of discussions, at least five potential partners were talking about bids in this range.

Huawei said it did not need the cash so could postpone the sale until conditions improve. "While international investors exhibited strong interest in the business, Huawei believes that given current global market conditions and prevailing economic uncertainty the interests of the company are best served by postponing the sale process," Huawei said in a statement. It said the business "will continue to fund its expansion plans from operating cashflow, and Huawei remains fully committed to the business."

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