Chinese firm’s US ambitions dealt a blow

Chinese technology conglomerate LeEco Inc. abandoned its planned $2 billion (Dh7.35 billion) acquisition of US television maker Vizio Inc. because of regulatory issues, and instead is exploring other ways to incorporate LeEco’s content into Vizio’s devices.

“The merger agreement to acquire Vizio will not proceed due to regulatory headwinds,” the companies said in an emailed statement. “We continue to believe that there is great synergy between the two companies.”

LeEco, the holding group for businesses controlled by billionaire Jia Yueting that span electric cars and media to smartphones and TVs, had announced the agreement to acquire Vizio last July. The deal was intended to create a foundation for branding and acquiring US customers. Bloomberg News reported earlier this month that the proposed acquisition was being held up by tighter controls on Chinese currency outflows.

Deal collapse

The collapse of the deal is another sign that LeEco’s global expansion plans are faltering. Jia said late last year the company was struggling to raise cash after the rapid expansion of his media and internet empire. Some suppliers said LeEco was behind on payments and the company was stripped of some sports broadcasting rights after missing payments on a contract.

Earlier this month, LeEco delayed paycheques for its US operation, which has suffered from key executive departures.

Chinese agencies have heightened scrutiny of outbound purchases over the past several months, an effort that coincides with a stronger government hand to limit capital outflows.