Chinese tech firm LeEco agrees to buy Vizio TV maker for $2B

MENLO PARK, Calif. (AP) - Chinese video streaming company LeEco is breaking into the U.S. TV market by buying Vizio, a manufacturer of budget-priced sets.

The $2 billion purchase announced Tuesday marks another ambitious foray by LeEco. The company's chairman and CEO, billionaire Jia Yueting, is also behind Faraday Future, an electric car company building a massive plant near Las Vegas.

Jia said the purchase is important to the company's globalization strategy and its efforts to build a presence in North America.

Vizio is based in Irvine, California, and is one of the leading brands in North America for smart TV and sound bar sales. Vizio will continue to operate as an independent subsidiary, and its brand will remain. The deal is to close by year's end.

The deal will help Vizio expand to markets beyond the U.S., Canada and Mexico. Meanwhile, with some 24 million internet-connected TVs combined, including some 8 million LeEco has sold in China, LeEco gains a larger audience for movies and TV shows that it produces or licenses. It is sometimes called the "Netflix of China," although it plans to allow U.S. customers to access Netflix on its smart TVs.

Winston Cheng, LeEco's global head of corporate finance and development, said in an interview that the company will need to expand its content offering to appeal to non-Chinese customers.

Jia owns half of LeEco. One of its businesses, LeVision Pictures, is co-financing "The Great Wall," a blockbuster starring Matt Damon. After the theatrical run, the movie will likely be offered for free streaming to LeEco and Vizio TV owners, but this is just one piece of a larger strategy to marry video subscriptions and hardware, Cheng said.

Cheng said LeEco is also planning an initial public offering of stock in the U.S. within four years to raise money for video content and research and development.