Walmart is reportedly in discussions to acquire smart-TV manufacturer Vizio for over USD 2 billion, potentially securing more than a fifth of the U.S. television market and strengthening its advertising business.
The proposed offer is almost 30 per cent higher than Vizio’s market cap of USD 1.54 billion on Monday. Walmart aims to leverage Vizio’s TVs to expand its advertising reach, providing more screens for companies like J.M. Smucker and Kraft Heinz to display ads to Walmart’s over 130 million weekly shoppers.
Walmart’s ad business, Connect, launched in 2021, has exhibited double-digit growth, generating approximately USD 3 billion in sales last year. The company anticipates more significant future profitability from selling ads on its properties, such as its website, digital displays, connected TVs and radio, rather than traditional retail items.
Retail media networks, including Walmart’s, have become attractive options for advertisers as platforms like Apple and Google limit third-party data sharing. These networks are projected to generate around USD 60 billion in sales in 2024.
Acquiring Vizio would grant Walmart access to Vizio’s active user base of nearly 18 million people and enhance Vizio’s software platform business, with advertising revenues growing over 27 per centannually at a margin rate exceeding 60 per cent.
Vizio currently holds the top shelf-share position at Walmart, with nearly 70 per cent of its TVs sold through the retailer. If the deal proceeds, Walmart could potentially control 22 per cent of the U.S. TV market between its private-label Onn brand and Vizio.
The potential acquisition raises concerns for Roku, a competitor in the smart TV and streaming device market.
However, discussions between Walmart and Vizio are ongoing, and the outcome remains uncertain. Vizio’s CEO, William Wang, holds majority voting rights and will ultimately decide whether to sell the company. Both Walmart and Vizio declined to comment on the matter.
