Chinese electronic maker LeEco has reportedly called off its ambitious $2 Billion acquisition of TV manufacturer Vizio. Both companies officially announced on Monday that the deal has been canceled.
Citing “regulatory headwind”, the companies amicably canceled the deal. The acquisition was met with obstacles from China’s regulatory body on accounts of outflow of Chinese capital out of the country in such a large amount. The original plan for LeEco was to utilize Vizio as a means to enter and quickly expand into North America, but the deal was yet to be approved by Chinese regulators.
The companies still intend to work together in some capacity, as the canceled deal is said to not affect any of LeEco’s other U.S. businesses. New plans for the companies include a symbiotic relationship; LeEco is looking to leverage Vizio’s smart TVs to get more video publishers to become part of its subscription services, while Vizio is looking at LeEco to expand its influence in the Chinese electronics market.
Under the new agreement, LeEco and VIZIO will continue to explore opportunities to incorporate the Le app and content within the VIZIO connected CE platform, and engage in a collaborative partnership to leverage LeEco’s EUI (Ecosystem User Interface) platform, along with the brand’s exclusive content and distribution channels, to bring VIZIO products to the China market.
News of the Vizio acquisition come on the heels of Vizio filing for an initial public offering. With LeEco backing out, Vizio may look for another acquirer or could go in again for an IPO. LeEco could also save up on some cash that it had almost ran out of, and maybe even look at paying its U.S. employees their salary.
What are your thoughts on the canceled deal between LeEco and Vizio? Were you looking forward to purchase LeEco smartphones in the US? Let us know your thoughts in the comments below!
Source: Variety.com
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