LeEco, the China-based electronics and media company, which earlier made an announcement to acquire Smart Tv maker Vizio for $2 billion, has now called the deal off. The company has cited “regulatory headwinds” as the reason behind this move, and has not specified any exact issue. The company has revealed that both the companies are undergoing new agreements, and will continue to explore opportunities to work together by incorporating the Le app and its content within VIZIO's connected CE platform.

In July last year, months after Vizio filed to go public, LeEco announced that it will be buying the smart TV maker for $2 billion.

The deal had to be approved by Chinese regulators. But, the company was affected due to the tighter regulations. As a part of the acquisition deal, LeEco had agreed to acquire Vizio's hardware and software operations, along with its technology and intellectual property.

LeEco's entry in the US and the cash squeeze issues

The deal was said to be the company's way to kickstart its operations in the US. In fact, LeEco launched and showcased several items at an event in the US just a couple of months after announcing the deal. It launched its smart TV, smartphone (or as the company calls it, Superphone), along with its very own self-driving car.

However, just few days after this, reports started coming in about serious cash crunch for the company.

It managed to come out of that phase by raises around $2.2 billion in January this year. During that cash crunch time, the company went through a lot of trouble. It had to let go of most of its staff in countries like India where it just started to establish its presence. Following that, its Faraday Future’s global chief executive, Ding Lei, also decided to step down.

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Along with the calling off of this deal, it is being speculated that the company's plans to build a huge office complex in the US may have also been called off. LeEco was planning to build a massive office space on a property which was formerly owned by Yahoo.

About Vizio and the road ahead

Founded in 2002, Vizio claims to be one of the leading consumer electronics companies in North America.

It focuses on delivering the ultimate home entertainment experience through its services, hardware and software. In February this year, Vizio settled with the U.S. Federal Trade Commission by agreeing to pay $2.2 million in fines. This was because of the company's data collection practices. It will be interesting to see what happens to Vizio now. At the time of the announcement of the acquisition, the company had already filed for an IPO. Now, the company has three options -- go the IPO route, look for another buyer, or keep operating as is.