Published: Tue, April 11, 2017
Global | By Maureen Mccoy

LeEco will not acquire Vizio because of 'regulatory headwinds'

LeEco will not acquire Vizio because of 'regulatory headwinds'

LeEco attributed its decision to scrap the deal to regulatory headwinds, and said the two companies still hope to work together. By many measures, the quickly growing company appeared poised to becomes a global consumer electronics powerhouse.

However, LeEco and Vizio have struck a new deal.

A LeEco spokeswoman declined to comment on "rumors or speculation" when asked about the report on payroll and tightening cash reserves at the company.

LeEco said on Monday it is walking away from its planned $2 billion acquisition of USA -based TV maker Vizio Inc., the latest scaling back of the embattled Chinese tech firm's ambitions. Going forward, they're planning to "explore" how they can partner to bring LeEco's app and content to Vizio's platform as well as bring Vizio products to the Chinese market.

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"We continue to believe that there is great synergy between the two companies", the joint statement said.

LeEco's finances have come under scrutiny, even as it has planned an ambitious US expansion. That could mean a lot of different things - but the result is the same: VIZIO and LeEco will remain separate companies and brands. It announced its deal to buy Vizio in July, and in October, the company debuted a smart TV, phone, and self-driving auto, as well as services to run on and connect its devices.

It certainly seems possible that the regulatory climate in China may have prevented LeEco from finalizing the Vizio acquisition. Last month, word broke that it was looking to sell the expensive land it bought in Silicon Valley just a year ago because of financial problems. Like other tech companies, LeEco's vision is to offer a suite of connected hardware and services. The companies will also leverage LeEco's "exclusive content and distribution channels" - which will "bring VIZIO products to the China market".

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