Online video company LeEco said Monday it has scrapped its $2 billion acquisition of US television maker Vizio, in the largest such deal to collapse as China tightens capital controls to rein in a recent wave of overseas investments.
In their announcement on Monday, LeEco and Vizio cited “regulatory headwinds” behind the decision to call off the $2 billion deal, announced last July during a flashy US event. The deal is not subject to antitrust approval in China, and increasingly strict currency controls were the most likely obstacle in its way, analysts said.
China introduced tighter restrictions on outbound investment in December to stop a drain on its foreign-exchange reserves and control the depreciation of its currency, the yuan. The government has advised Chinese companies to “make decisions prudently,” in an apparent reference to a wave of recent overseas purchases, many worth $1 billion or more.
Full Content: Caixin Global
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