Exterior view of a Walmart store on February 19, 2024 in Secaucus, New Jersey. Walmart is scheduled to report its fiscal fourth-quarter 2024 results on February 20.
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Walmart has agreed to buy television manufacturer Viziothe companies announced Tuesday, as the largest U.S. retailer ramps up its highly profitable advertising business.
Walmart will acquire Vizio for $2.3 billion, or $11.50 per share, in cash. The big-box retailer announced the acquisition while reporting its fourth-quarter earnings.
Vizio shares, which soared after reports of the deal first emerged last week, closed at $9.53 on Friday. They jumped 15% during early trading on Tuesday.
Walmart and its Sam's Club department store chain have long been major sellers of Vizio devices. But in purchasing the company, Walmart touted the potential to boost its advertising business through Vizio's SmartCast operating system, which allows users to stream free, ad-supported content to their TVs.
As it seeks higher profits, the retail titan has sought to expand its Walmart Connect media business, which offers higher profit margins than selling food or clothing. The segment's advertising sales grew 22% in the fourth quarter.
“We believe VIZIO's customer-centric operating system delivers great viewing experiences at attractive prices. We also believe it enables a profitable advertising business that is scaling rapidly,” said Seth Dallaire, executive vice president and chief revenue officer at Walmart US, in a statement.
The move comes as Walmart tries to compete with Amazon's growing advertising segment.
Walmart's control over 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, home entertainment and multimedia experiences” after acquiring the TV maker.
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