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CFIUS Filing Abandoned/Likely Clearance: Vizio and LeEco

In July 2016, California based consumer electronics company Vizio, Inc., entered into a merger agreement with LeEco V. Ltd., a Cayman Islands company and subsidiary of the Chinese conglomerate LeEco Global Holding Ltd. (aka Global Holding), and Le V Merger Sub, Inc., whereby Vizio would merge into Merger Sub surviving as a wholly owned subsidiary of LeEco V. Ltd. (See Complaint, Vizio, Inc., v. LeEco V. Ltd., ECF No. 1, Docket No. 8:17-cv-01175 (C.D. Cal. Jul 11, 2017) (hereinafter Vizio, Inc., v. LeEco V. Ltd.)  CFIUS clearance was a condition to the transaction.  (See Section 7.1(a)(ii), Agreement and Plan of Merger, Wang Dec. Exhibit 1 p. 80 to Vizio’s Opp. to Def.’s Mot. to Set Aside Entry of Default, Doc. No. 23, Vizio, Inc., v. LeEco V. Ltd.)  Without much detail, news broke in April 2017 that “LeEco Global Group Ltd’s merger agreement to acquire [V]izio will not proceed due to regulatory headwinds.”  (Reuters, BRIEF-LeEco says merger agreement to acquire Vizio will not proceed due to regulatory headwinds, Apr. 10, 2017.)   

Shortly after, in July 2017, Vizio brought a legal action against LeEco on various claims arising out of the failed merger agreement.  (See Vizio, Inc., v. LeEco V. Ltd., cited supra).  According to an exhibit to a recent court filing in this case, the parties submitted a draft Joint Voluntary Notice to CFIUS on July 27, 2016, and submitted a formal filing on September 7, 2016.  (SeeWaxman Dec. Exhibit 3 p. 40 to Vizio’s Opp. to Def.’s Mot. to Set Aside Entry of Default, Doc. No. 23, Vizio, Inc., v. LeEco V. Ltd.)  Additional, although the deal was ultimately abandoned, the exhibit indicated that “the conclusion of CFIUS’ review and investigation [was] on November 5, 2016 . . .”  (Id. at p. 41.)

Status:  Abandoned/Likely Clearance

Acquirer:  LeEco V. Ltd. (Cayman Islands); LeEco Global Holding Ltd. (China)

Acquired:  Vizio, Inc. (US)

Value:  Approx. US$2.25 billion

Industry:  Consumer electronics

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