Walmart to acquire Vizio for $2.3 billion to boost its ad business

In a strategic move to bolster its high-profit ad business, Walmart has announced the acquisition of TV manufacturer Vizio for $2.3 billion in cash, equating to $11.50 per share. This acquisition comes on the heels of Walmart’s fourth-quarter earnings report, showcasing the retail giant’s commitment to expanding its presence in the competitive smart TV market. 

Vizio’s Vizio Platform Plus business, boasting over 500 direct advertiser partnerships and contributing significantly to the company’s gross profit, played a pivotal role in making it an attractive acquisition target. Additionally, Vizio’s SmartCast, utilized by more than 18 million active accounts, adds substantial value to Walmart’s portfolio.

While Walmart already offers its in-house brand of TVs under the Onn label, the acquisition of Vizio positions the retail behemoth to enhance its competitiveness against smart TV rivals like Amazon and Roku. The move aligns with Walmart’s previous collaborations in the digital advertising space, such as partnerships with Innovid and Roku for personalized and “shoppable” ads on TVs, respectively.

“There is a lot to be excited about with this acquisition,” said Seth Dallaire, executive vice president and chief revenue officer, Walmart U.S. “We believe VIZIO’s customer-centric operating system provides great viewing experiences at attractive price points. We also believe it enables a profitable advertising business that is rapidly scaling. Our media business, Walmart Connect, is helping brands create meaningful connections with the millions of customers who shop with us each week. We believe the combination of these two businesses would be impactful as we redefine the intersection of retail and entertainment.”

Despite Walmart’s established presence in the TV market, the acquisition of Vizio is poised to bring additional capabilities and a more robust product lineup. The proposed deal is contingent on regulatory approval and includes a provision allowing Vizio to consider superior offers within a 45-day period. 

This strategic move comes at a time when Vizio has revamped its TV software, emphasizing the importance of software differentiation in an increasingly competitive landscape against brands like Hisense, TCL, and budget-friendly Roku TVs. As the retail giant delves further into the smart TV market, the acquisition of Vizio marks a significant step in Walmart’s efforts to diversify and strengthen its foothold in the evolving realm of digital entertainment.

“We believe this is the ideal next chapter in VIZIO’s history. By bringing our capabilities and resources together, we’ll drive innovation and create even more value for our customers,” said William Wang, chief executive officer of VIZIO. “Walmart’s approach is aligned with VIZIO’s mission and vision, and our technology will help bring a scaled, connected TV advertising platform to Walmart Connect. This transaction delivers immediate and compelling value to VIZIO stockholders and is a true testament to the hard work of the entire VIZIO team.”