LeEco is pulling back from its original plans of acquiring US based TV maker Vizio. The Chinese electronic behemoth announced that regulatory headwinds had forced the two companies to scrap the deal. The decision was mutual and the two will instead explore partnerships focused upon content and its distribution.
Last year, it was announced that LeEco was planning to acquire US based TV maker Vizio for a sum in the neighborhood of $2 Billion. However, money isn’t likely to be the issue here considering that LeEco had recently raised a significant amount of funding from a bunch of new and existing investors.
The Vizio deal hit a significant bump when it was discovered that Vizio was using its televisions to record data from its customers. Considering that data is nothing short of a commodity in the present era and that recording it without first informing the customers of what it was doing, Vizio was found to have committed a pretty serious offense and charges were brought against it by the FTC.
The case was later resolved when Vizio agreed to pay $2.2 million against its illegitimate TV data collection techniques. The company also agreed to delete the data it had collected through its 11 million viewing customers without their consent. However, despite all this, LeEco had continued with its intent of purchasing the TV maker.
However, regulatory hurdles have proved to be an insurmountable hurdle in the path of these two companies. While surprising, this isn’t exactly a bolt from the blue. Large deals have always attracted regulator scrutiny and neither Chinese nor US regulatory authorities are known to be go easy where deals of this magnitude are concerned.
Meanwhile, apart from distributing LeEco’s content through Vizio’s network, the partnership will also see Vizio bring its hardware to the Chinese market. We have yet to receive particulars of how the duo will operate in the future but, such a partnership will open up huge markets for both the companies.