A multibillion dollar deal between a struggling Chinese technology conglomerate and television maker Vizio has fallen apart.
LeEco said Monday that a proposed $2 billion acquisition of Vizio “will not proceed due to regulatory headwinds.” The China-based company first announced it would buy Vizio last summer and planned for Vizio to become a subsidiary under the deal.
LeEco did not explain what were the regulatory headwinds it referred to in its statement. A spokesperson told Fortune in an email that the two companies would partner on several projects, including an initiative that would help “bring Vizio products to the China market.”
Although relatively unknown outside of China, LeEco has been trying to expand its operations in the U.S. in recent years to so-far limited success. The company held a lavish press event in San Francisco in October when it outlined a hodgepodge of products it intends to become hits with U.S. consumers.
Some of the areas LeEco is trying to push in the U.S. include smartphones, on-demand video-streaming services, self-driving cars, 4K televisions, an e-commerce platform, and Internet-connected bicycles. The company has singled out several giant U.S. technology companies as its competitors, including Google (GOOG), Apple (AAPL), Tesla (TSLA), and Amazon (AMZN).
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By buying Vizio, LeEco would have gained well-known U.S. brand known for selling relatively cheap consumer electronics, like televisions and computer monitors. However, LeEco has reportedly struggled with its finances as it attempts to meet the grand ambitions of its charismatic CEO Jia Yueting.
In March, a Chinese news outlet reported that the deal between the two companies was put on hold as the Chinese government was placing more scrutiny on local businesses seeking outbound investments. But even without the Chinese government’s approval, it’s unclear if LeEco could have financed the deal on its own.
Jia told his employees in a letter last fall that LeEco was running low on cash and succumbed to what he described as “big company disease.” Essentially, LeEco expanded to quickly beyond its means, and Jia would slash his yearly salary to $0.15 in response, he wrote at the time.
In March, a Reuters report said that LeEco was trying to sell a nearly 50-acre property in Santa Clara that it bought from Yahoo in June for $250 million. Then, in an another sign that it’s money problems have not let up, Bloomberg News reported in April that LeEco delayed payroll for its U.S. employees.
As for Vizio, the Irvine, Calif.-based company initially filed paperwork to go public prior to LeEco’s proposed acquisition. Fortune reported in November that the TV maker was planning to raise money at a valuation under $1 billion through an IPO.
According to a Variety report Monday based on an unnamed source, Vizio does not plan on an IPO anytime soon because recent financial turmoil at action-camera maker GoPro (GPRO) has discouraged its management from listing on Wall Street.
Fortune contacted Vizio and will update this story if it responds.