LeEco acquires VIZIO for US$2 Billion.
If you are not familiar with LeEco, it is not your fault really. Not many are familiar with the Chinese technology company anyway. LeEco is a Chinese technology company found in 2004 that focused on online video contents. Found in November, 2004 they were in the hardware manufacturing industry alongside their video production and distribution business. By late 2014 they started getting involved in a slew of businesses such as e-commerce, eco-agriculture, and internet-linked electric cars. Very much like Apple and the Apple ecosystem, LeEco have been pushing towards building their own Le Ecosystem with a collection of applications, video contents, and other online contents meant to cater to devices produced ad developed by LeEco. S
Since its inception, LeEco have manufactured six smartphones under their own Le brand, namely; Le 1, Le 1 Pro, Le Max, Le 1s, Le 2, and Le Max 2. These smartphones are available only to the China, United States, and India though. That is probably why you may not know them. Recently though LeEco is named “Most Innovative Companies” by Fast Company.
VIZIO, by contrast is a California based consumer electronics brand founded in 2002. In the United States the brand is actually sitting at the top of market shares in both the Smart TV and Sound Bars market. The brand focuses on providing the best sort of home entertainment through unique combination of hardware and software systems.
Referring back to the title, LeEco has just made an important acquisition of VIZIO, and yes, for US$2 billion (MYR8.2 billion). The agreement of this acquisition means that LeEco will have total ownership of VIZIO’s business and any patents belonging to VIZIO. The acquisition though does not dissolve the brand. Instead the brand will continue to operate as its own brand with its management team untouched and distribution channels untouched. VIZIO also owns Inscape, a data servicing company which is not actually part of the deal. Inscape will operate on its own as as a privately owned company.
The acquisition of VIZIO is a significant move by LeEco that could prove vital in not only securing its position in the North American region. The move may help build a larger brand presence for LeEco in the region while expanding distribution. VIZIO’s product know how could also be a valuable resource to LeEco’s research and development especially in their smart TVs platform. Press release after the break.
Pioneering Internet Ecosystem Company LeEco Acquires VIZIO for US$2B
Disruptive, first-of-its kind ecosystem model delivers new value for U.S. consumers
San Jose, CA and Irvine, CA — July 26, 2016 — LeEco and VIZIO, Inc. announced today 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.
“LeEco believes in breakthrough technologies, a complete ecosystem and disruptive pricing. Acquiring VIZIO is an important step in our globalization strategy and building our North American presence,” said Yueting Jia, Founder, Chairman and Chief Executive Officer, LeEco. “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.”
Based in Irvine, CA and founded in 2002, VIZIO is a leading consumer electronics brand in North America, with #1 unit share in Smart TVs and #1 unit share in Sound Bars. 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.”
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 softwareoperations, 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.