LeEco abandons $2 billion Vizio deal, citing ‘Chinese policy factor’
Chinese electronics giant has abandoned the deal with US electronics major Vizio citing policy regulations in China. The company had planned the deal to pull itself out of a major cash crunch that was declared by its founder last November.
Chinese tech conglomerate LeEco, whose businesses stretch from smartphones to electric vehicles, has abandoned a $2 billion proposed acquisition of U.S. consumer electronics company Vizio, the company said on Tuesday.
A LeEco representative reached by Reuters on Tuesday cited a "Chinese policy factor" for abandoning the proposal, but declined to provide further details.
The deal was first announced in July, with LeEco agreeing to acquire the Irvine-based manufacturer of LCD/LED flat panel TVs.
In recent months, LeEco has faced financial troubles due to the rapid pace of growth of its various businesses, with founder and chairman Jia Yueting acknowledging in a staff letter that the firm faced a "big company disease."
However, in March, the company successfully secured $2.2 billion for expansion from investors including property developer Sunac China Holdings Ltd, whose investments went into LeEco's smart internet TV subsidiary Leshi Zhixin, as well as its film production subsidiary, Le Vision Pictures.
Late on Monday, LeEco's listed unit Leshi Internet Information & Technology Corp Beijing issued a profit alert for the first quarter, saying it sees net profit at 103 million-132 million yuan from 114.7 million yuan ($16.62 million) net profit a year earlier.
($1 = 6.9033 Chinese yuan renminbi)