According to Zheng Xiaoming, senior vice president of LeSco Global Capital, the entity that made the acquisition was LeEco Global, a subsidiary of LeTV Holdings, which is in a parallel relationship with LeTV.
Zheng Xiaoming also said that in the future, LeEco Global will be listed in the United States. The acquisition will be completed in cash and funds will come from the inside. As the acquisition will increase LeTV’s asset-liability ratio, LeTV will conduct equity financing in the short term. LeTV's acquisition of Vizio means that the company has occupied a large share of the U.S. TV market in an instant.
After the acquisition transaction is completed, LeTV will operate Vizio as an independent subsidiary. For Vizio's management team, their current plan is to stay and continue to work in their office in Southern California. At the same time, Vizio’s Inscape data business will be transformed into a privately held company, with Vizio’s current chief executive, William Wang, as chairman and chief executive officer.
Recently, LeTV has always focused on introducing its talents to the United States. At the Consumer Electronics Show (CES) held earlier this year, LeTV released several new smart phones, and soon afterwards changed the name of the company from LeTV to LeTV. Now, LeTV has already stood in a superior position and will be able to start offering its products to American consumers. For now, LeTV is not known in the United States, but with the help of the Vizio transaction, this situation may change, and this change may soon occur.
LeTV expects that the acquisition of Vizio will be completed in the fourth quarter of this year. Although LeTV plans to let Vizio continue to operate as an independent company, the question now is whether the smart TVs produced by Vizio will continue to run their own software or will instead run LeTV's smart TV software. In addition, the deal also means that Vizio may start selling its branded smart phones in the U.S. market, which is a bit like what happened after Motorola and Lenovo announced their M&A deals in 2014.
For this transaction, Leighton chairman and chief executive officer Jia Yueting said: “The concept of LeTV is to have breakthrough technologies, a complete ecosystem, and disruptive product pricing. The acquisition of Vizio is an important step in the company’s globalization strategy. , allowing us to establish a business in the North American market."
At present, it seems that entering the North American market is very important to any company from China and even Asia as a whole, because the North American market has great growth potential.
Vizio founder Wang Wei is an American Chinese. He was born in Taiwan, China. He founded a display company named MAG Innovision before the establishment of VIZIO in the 1990s. Vizio can be said to be an example of the success story of the United States. In 2012, the company had a total of 417 employees, of whom all but three were working in the United States. The company's obscure but steady development and expansion of its own business has become an important market participant in the US television industry.
But last year, Vizio attracted some criticism because the company was discovered that its smart TV products will collect information about the user's viewing habits, and then the company will share the data through its Inscape business. As part of the M&A agreement, Vizio will continue to license Inscape technology for its TV products for the next 10 years after it is owned by LeTV. Vizio will retain all current Vizio distribution agreements.