LeEco’s acquisition of US television maker Vizio has taken months longer than the companies initially projected and may be in jeopardy, according to recent reports. Last week, Chinese news service Caixin reported that the deal was being held up because of two problems: tighter currency restrictions inside China and LeEco’s well-publicized cash crunch. Today, Bloomberg followed up by revealing that LeEco may be looking into potential contingency plans if the original goal — a full $2 billion acquisition of Vizio — fails to materialize. “LeEco is now exploring other options, including taking a minority stake in or partnering with Vizio,” the report said. When contacted by The Verge for an update last week, Vizio spokesperson Katie Kotarek did not respond.
Last summer, both companies were hopeful that the deal would successfully close by the fourth quarter. In December, LeEco told Recode that US regulators had signed off on everything, but the same wasn’t true of Chinese authorities. “We are awaiting regulatory approval in China,” a spokesperson said at the time. Buying Vizio was seen as a way for LeEco to fast-track its way into US living rooms; LeEco sells unlocked smartphones in the United States as well as its own televisions, but Vizio’s sets are very successful and big sellers at Best Buy, Walmart, Target, and other retailers.
In February, just after the FTC announced a $2.2 million settlement with Vizio over the company’s collection of customer viewing data, LeEco again pushed the message that all was well despite the delays. “LeEco is committed to the Vizio deal and it is priority for us, the process is on the right track, please stay tuned,” the company told TechCrunch.
But word that LeEco is now exploring other scenarios with privately-held Vizio suggests that everything is not on the right track. The question now is whether it’s due to China’s restrictions around overseas-bound capital or LeEco’s finances and a regret to spend so much in the first place. The Verge has again reached out to Vizio and LeEco for comment.