LeEco buys Vizio for $2 billion

NEW DELHI: Chinese internet and technology conglomerate LeEco and California-based Vizio, both have announced a definitive agreement under which LeEco would acquire VIZIO, Inc. for $2 billion USD.

The Vizio hardware and software businesses will be owned and operated as a wholly owned subsidiary of LeEco, while the VIZIO data business, Inscape, will spin out and operate as a separate, privately owned company.

Recently named one of Fast Company's 2016 "Most Innovative Companies," LeEco is a leading global company that provides breakthrough experiences through an open, integrated ecosystem enabled by its Internet and cloud platform. LeEco develops intelligent hardware that serves as the interface to connect individuals, interact with them and to enrich their lives through premium content and applications.

"From its inception, Vizio introduced a disruptive business model that changed the industry and aligns with our vision of breaking boundaries to deliver consumer-focused products, software and services,"  said YT Jia, Founder, Chairman and Chief Executive Officer, LeEco.

Based in Irvine, CA and founded in 2002, Vizio is a leading consumer electronics brand in North America, with #1 unit share in Smart TVs1 and #1 unit share in Sound Bars2. The company is focused on delivering the ultimate home entertainment experience through its ecosystem of hardware, software and services.

The acquisition benefits both companies with Vizio offering LeEco a steady install base of users and a brand that is both popular and successfully distributed throughout major North American retail channels. LeEco provides Vizio immediate global scale to bring its innovations to consumers worldwide. Like LeEco, Vizio shares a similar vision of creating premium products with the latest innovations and making them accessible for everyone – from budget-minded students to custom home theater cinephiles – without sacrificing quality or performance.

"Fourteen years ago, I mortgaged my house to start Vizio and since then, it has grown into one of the most well-known and respected CE brands in North America. As an entrepreneur, I couldn't be more proud of what has been accomplished," said William Wang, Founder, Chairman and Chief Executive Officer, Vizio.

"As we enter a new chapter with LeEco, I'm humbled by the hard work and dedication of Vizio shareholders and employees. Their unwavering faith in the brand and commitment to excellence is what made this venture possible. I'm excited to see how LeEco's global reach and resources will elevate Vizio as we continue to bring great technology, innovation and value to our consumers," said Wang.

The Vizio executive management team will remain in place and will continue its operations as an independent subsidiary from its existing headquarters in Irvine, CA. The Vizio brand and its portfolio of products will continue to be sold through its existing distribution channels and supported by the same North American-based, award-winning customer service. William Wang will transition to Chairman and Chief Executive Officer of Inscape, with focus on the continued expansion and growth of the brand's data business.

As part of the definitive agreement, LeEco will acquire all of the Vizio hardware and software operations, technology and intellectual property. The transaction is expected to close during the fourth quarter of 2016, and is subject to customary closing conditions. BofA Merrill Lynch acted as advisor to the special committee of the Vizio board of directors, and Latham & Watkins LLP served as legal counsel for Vizio on this transaction.