Under the deal, Vizio's hardware and software businesses will be owned and operated as a wholly owned subsidiary of LeEco.
Chinese tech company LeEco is venturing into the American soil, starting with the acquisition of U.S. TV maker Vizio for $2 billion.
Under the deal, Vizio's hardware and software businesses will be owned and operated as a wholly owned subsidiary of LeEco, while Vizio's data business, Inscape, will spin out and operate as a separate, privately owned company.
Beijing-based LeEco develops intelligent hardware that serves as the interface to deliver "premium content and applications." The company started out with Letv, a Netflix-style video website, before entering the smartphone business.
"LeEco believes in breakthrough technologies, a complete ecosystem and disruptive pricing. Acquiring Vizio is an important step in our globalisation strategy and building our North American presence," said YT Jia, founder, chairman and CEO of LeEco.
Based in Irvine, Calif., and founded in 2002, Vizio is a popular consumer electronics brand in North America, with no. 1 unit share in Smart TVs1 and no. 1 unit share in Sound Bars2. 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.
"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 CEO VIZIO.
Wang will transition to chairman and CEO of Inscape, with focus on the continued expansion and growth of the brand's data business. The Vizio executive management team, however, will remain in place and will continue its operations as an independent subsidiary from its existing headquarters in Irvine. 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 customer service.
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 of 2016, and is subject to customary closing conditions.