Chinese electronics firm LeEco is buying U.S. TV manufacturer Vizio in an all-cash deal valued $2 billion.
The acquisition which was announced at a Los Angeles press conference, gave LeEco an instant foothold in the US television market. The acquisition details came from Vizio founder and CEO William Wang at a joint press event in Hollywood.
According to The Verge, the deal will see Vizio be operated as an independent subsidiary, with the company's current executive team staying in place and will be working out of Vizio's offices in Southern California - sans. Currently, no replacement has been named, but Wang will be taking the reins as chairman and CEO of Inscape, Vizio's data business, which is being spun out into a privately held company.
Under the deal, LeEco will own 49 percent of Inscape and Wang owning the remaining 51 percent.
In the press conference which was seen to be more of a eulogy, Wang described the company's humble beginnings, and how it had fought through challenges such as financial crisis as it slowly made its way to success. Before lauding most of Vizio's senior leadership team, Wang pointed out that the firm had to fight through competition from all over the world.
"I have mixed feelings," Wang added before handing the microphone back to Vizio's new owners. He said as the owner and father of Vizio, he is really reluctant to let it go. But to him as a CEO and chairman, that will be the right decision to make for the hardworking employees and loyal shareholders.
Despite LeEco not been a familiar name in many US households, the company has been making headlines for a couple of years by trying its hand at pretty much everything in the consumer electronics sphere. Among such ventures include, Android-powered bicycles, smartphones (that ditch the headphone jack, no less) and electric cars seen by LeEco as opportunities.
On the other hand, Vizio has styled itself as an American success story. Back in 2012, only three of the company's 417 employees worked outside the US. It is quiet and steady presence made it become a major player in the TV space. The company however was criticised last year when it was noticed that its smart televisions were collecting information about user viewing habits that it was then sharing as part of its Inscape business.
In the acquisition agreement, Vizio will continue its operations as an independent subsidiary in Irvine, California with the executive management team remaining in place. Its products will continue to be sold as normal with the customer service remaining in the US, CNet reported.
The transaction is expected to be through by close in the fourth quarter of the year.
Watch a video of the acquisition here: