American TV manufacturer Vizio is being sold to Chinese technology company LeEco for about $2 billion.
Vizio will be operated as a wholly owned subsidiary.
Vizio CEO William Wang made the announcement at a press event in Los Angeles this morning. "As the father and founder of Vizio, I have mixed feeelings about this. But for our shareholders and employees, I know this is the right thing to do," said Wang.
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 be spin off and operate as a separate, privately owned company led by Wang.
"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 YT Jia, founder, chairman and CEO of LeEco.
In a statement, the companies said 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.
"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 Wang. "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."
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The Vizio executive management team will remain in place and will continue its operations as an independent subsidiary from its existing headquarters in Irvine, Calif.
The Vizio brand of smart TVs and soundbars will continue to be sold through its existing distribution channels and supported by the same North American-based customer service.
Wang will transition to chairman and CEO 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.