Exterior of a Walmart store on February 19, 2024 in Secaucus, New Jersey. Walmart is scheduled to report its fourth-quarter 2024 financial results on February 20.
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Walmart has agreed to buy the TV maker Viziothe companies announced Tuesday as the largest U.S. retailer expands its high-profit advertising business.
Walmart will acquire Vizio for $2.3 billion, or $11.50 per share, in cash. The major retailer announced the acquisition as it reported its fourth-quarter results.
Vizio shares, which soared after reports of the deal first emerged last week, closed at $9.53 on Friday. They rose 15% during early trading on Tuesday.
Walmart and its Sam’s Club warehouse chain have long been major sellers of Vizio devices. However, in purchasing the company, Walmart emphasized the potential to boost its advertising business through Vizio’s SmartCast operating system, which allows users to stream free ad-supported content on their televisions.
In search of higher profits, the retail giant has sought to expand its Walmart Connect media business, which offers larger profit margins than selling groceries or clothing. The segment’s advertising revenue increased 22% in the fourth quarter.
“We believe VIZIO’s consumer-focused operating system delivers great viewing experiences at attractive prices. We also believe it enables a profitable advertising business that scales quickly,” said Seth Dallaire, executive vice president and chief revenue officer of Walmart US, in a statement.
With this move, Walmart is trying to compete with Amazon’s growing ad segment.
Walmart’s control of the Vizio platform will give companies that advertise with the retailer greater reach. In a press release, Walmart said Vizio’s SmartCast system has 18 million active accounts.
The retailer also said it would be able to offer “innovative television, in-home entertainment and media experiences” after acquiring the TV maker.
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2024-02-20 15:04:24
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