On February 20, Walmart announced that it would acquire American TV manufacturer Vizio for US$11.50 per share in cash, with a total transaction value of approximately US$2.3 billion. This move is aimed at accelerating the development of Walmart's advertising business.
Vizio is a mid-range TV manufacturer that focuses on reliable performance and ranks third in the U.S. market share. Most of its products are equipped with SmartCast OS system, can play free content supported by advertising, and has more than 18 million active accounts. In addition, Vizio operates the Vizio Platform Plus business and works with more than 500 advertising partners.
In recent years, Walmart has been working to expand its media business, Walmart Connect, because the business is much more profitable than its retail business. Data shows that in the fourth quarter of 2023, Walmart Connect’s advertising sales business increased by 22%. The acquisition comes as Walmart looks to compete with Amazon in advertising, an area with promising growth prospects. As a major retailer of Vizio TVs, Walmart sees potential in Vizio's SmartCast system to boost its advertising business.
Walmart itself has an advertising business worth about $2.7 billion, but Vizio's advantage lies in its ability to push content to targeted consumers more accurately. This acquisition will help Walmart place ads more effectively, and can even play ads for Walmart’s own products directly on Vizio TVs to encourage users to make purchases at Walmart.
The acquisition will undoubtedly expand the reach of ads posted on Walmart's platform. Vizio CEO William Wang said, "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."
Seth Dallaire, Walmart U.S. executive vice president and chief revenue officer, said, "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."