In deal that shakes up the TV market, China-based consumer tech giant LeEco of China has inked a $2 billion deal to acquire Vizio.
Per the deal, Vizio’s hardware and software will be owned and operated as a wholly owned subsidiary of LeEco, while Vizio’s data business, Inscape, will be spun out as a separate, privately owned company.
They said the Vizio exec team will remain in place and continue its operations as an independent subsidiary from its existing headquarters in Irvine, Calif. William Wang, founder, chairman and CEO of Vizio, will become chairman and CEO of Inscape.
The deal catapults LeEco into the U.S. market. LeEco, which has its own Netflix-like video streaming service, is poised to take over a major U.S. TV player. Vizio, founded in 2002, held 29.1% of the smart TV market in North America, behind Samsung’s leading 37.4%, The Wall Street Journal said, citing IHS Markit data.
Of recent note, Irvine, Calif.-based Vizio added Google Cast (the same tech that powers the Chromecast streaming adapter) to its SmartCast P-Series TVs, as well as its line of soundbars and speakers. Ever P-series comes with a six-inch, Android-powered Vizio tablet that also serves as a fancy remote control.
LeEco said the deal will provide it with “immediate global scale.”
“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.”
“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,” Wang added.
They expect to wrap the deal in Q4 2016.
BofA Merrill Lynch acted as advisor to the special committee of the Vizio board, and Latham & Watkins LLP served as legal counsel for Vizio.