INFO Ihs Markit Ltd.

By Georgia Wells 

LeEco said Tuesday it has signed a $2 billion deal to buy Vizio Inc., the last U.S.-based TV brand, giving the Chinese company a foothold to fuel expansion beyond its home market.

LeEco will pay cash to acquire Vizio, which last year filed documents to list on the stock market.

The move is a part of LeEco's strategy to deliver both hardware -- smartphones, TVs, even driverless cars -- as well as content -- from film and online entertainment to sports. Until now, LeEco has offered that only in China and India.

"I hope we can lead the future of the internet ecosystem era," LeEco chief executive Jia Yeuting said at a press conference in Los Angeles.

Vizio controls the second-greatest share of the U.S. market for televisions and smart televisions, behind Samsung Electronics Co., according to IHS Markit, a market research firm. In the first quarter of the year, Vizio sets made up 29.1% of the market for smart televisions in North America, compared with 37.4% for Samsung.

Though Vizio is the only remaining TV brand based in the U.S., other TV makers assemble their units in the U.S., said Paul Gagnon, director of TV set research for IHS Markit. Vizio manufactures its electronics in several countries, including the U.S., and doesn't make TVs for the Chinese market.

LeEco has followed an unconventional path to growth. It started as a small video website that went public as Leshi internet Information & Technology Corp. in 2010. In early 2015, it launched its first smartphones and it became one of the most valuable tech stocks listed in China after its shares rallied. LeEco changed its name from LeTV last year.

LeEco sold 4.5 million internet TVs in two years, according to its 2015 annual report, and has said before the Vizio deal that it is confident it can sell 6 million smart TVs this year.

But LeEco needed revenue and a brand to expand its presence in the U.S., something Vizio could provide, according to a person close to the deal. LeEco has an online electronics store in the U.S. that sells televisions, speakers, headphones and other gadgets.

Vizio, which was founded in 2002 in Irvine, Calif., has annual sales of more than $3 billion, William Wang, chief executive of Vizio, said Tuesday. Vizio sold 7.8 million TVs in the U.S. last year, according to IHS Markit.

Vizio faced a setback recently in its failure to go public. It filed for an IPO in a year ago, but hasn't listed.

In addition to its TV sets and sound bars, the company also collects data about viewing habits from its products. That data is the foundation for Inscape, a business that LeEco plans to spin out as a separate private company.

Vizio will continue to be based in southern California and will run by current management as a subsidiary, according to a statement from LeEco.

Mr. Jia's desire to enter the U.S. market counters a wave of U.S. companies looking to Asia for growth.

"The world moves East, and we move West," said Winston Cheng, LeEco's global head of corporate finance.

--

Li Yuan

and Maria Armental contributed to this article.

Write to Georgia Wells at Georgia.Wells@wsj.com

(END) Dow Jones Newswires

July 26, 2016 18:28 ET (22:28 GMT)

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