In recent years, LeEco has grown so fantastically that it faced financial issues. Its founder termed these issues as the “big company disease.”
LeEco, a recent Chinese tech company with global ambition whose businesses have ranged from electric vehicles to smartphones, has been forced to abandon its proposed $2 billion acquisition of Vizio, a U.S. consumer electronics company due to a “Chinese policy factor”.
This is the reason LeEco gave for abandoning the deal without providing any further details.
The proposed deal was first made public in July 2016, with LeEco agreeing to acquire Irvine-based Vizio who manufactures LCD/LED flat panel TVs.
In recent months the company has faced financial trouble due to its frantic growth speed in various businesses, with Jia Yueting, its founder and chairman, acknowledging in a staff letter that the firm faced a “big company disease.”
Nevertheless, in March 2017, LeEco managed to successfully secure $2.2 billion from investors to expand its business. The investment went into LeEco’s smart internet TV subsidiary Leshi Zhixin, as well as its film production subsidiary, Le Vision Pictures.
Late on Monday, the company’s Leshi Internet Information & Technology Corp Beijing, a U.S. listed unit, issued a profit alert for its first quarter, which pegged its net profit at 103 million-132 million yuan from 114.7 million yuan ($16.62 million) net profit a year earlier.