Chinese TV manufacturer LeEco’s takeover of U.S. TV maker Vizio for US $2 billion is still waiting for approval from Chinese government authorities, according to a TechNews report.
Vizio has the largest market share in U.S. TV market. If Vizio becomes an acquired asset by LeEco, the company will surpass Hisense and TCL to become the world’s third biggest TV supplier. The deal has been approved by U.S. authorities, but the Chinese government has not granted approval yet, reported American media Recode. Completion of the business transaction has been delayed till 2017.
LeEco's LED TV. (LeEco/LEDinside)
“We are waiting for Chinese government to approve the acquisition,” said LeEco spokesperson. The merger and acquisition will not be completed until first quarter of 2017.
LeEco was hoping to strengthen its recognition in U.S. distribution channels by acquiring Vizio, and expand its TV sales. LeEco aimed to expand its market in the U.S., and spent nearly US $250 million to buy Yahoo’s campus in Santa Clara. Moreover, the company hired many senior ranking officers.
Another obstacle impeding Chinese government’s approval of the merger is LeEco’s financial issues, the company chairman Jia Yueting responded the company growth exceeded their managing capacity, and promised they would seek more sustainable business models.
“We were blindly pursuing and burning money to scale up production, which overstretched our globalization strategy that greatly limited our finances and resources,” said Jia.
Responding to financial issues, LeEco will continue to process its Vizio acquisition case, and expand its TV and smartphone products in the U.S. market. LeEco noted the company’s distribution channels in U.S. will not be limited to its official website, but also Best Buy, Amazon and Target.com to sell its TV and smartphone products.