To expand its advertising business, Walmart plans to pay $2.3 billion to acquire TV manufacturer Vizio
The big-box retailer is attempting to grow its high-margin ad business by making this step.
Walmart has decided to acquire TV manufacturer Vizio, the firms said on Tuesday, as the biggest American retailer expands its very profitable advertising division.
Vizio will be purchased by Walmart for a cash price of $2.3 billion, or $11.50 per share. The acquisition was disclosed by the big-box retailer along with its fourth-quarter financial results
Friday’s closing price for Vizio shares, which had surged on the first disclosure of the agreement last week, was $9.53. During Tuesday’s early trade, they increased by 15%.
For a long time, Walmart and its Sam’s Club warehouse network have been significant Vizio device dealers. Walmart, however, used Vizio’s SmartCast Operating System—which enables customers to access free ad-supported content on TVs—as leverage in its acquisition of the firm.
The retail behemoth has attempted to grow Walmart Connect, its media division, which has greater profit margins than groceries or apparel, in an effort to increase earnings. The fourth quarter saw a 22% increase in the segment’s advertising sales.
Businesses who partner with Walmart for advertising will have a wider audience thanks to Walmart’s ownership of the Vizio platform. Walmart stated in a press release that there are 18 million active accounts on Vizio’s SmartCast technology.
Following its acquisition of the TV manufacturer, the store added that it will be able to provide “innovative television and in-home entertainment and media experiences”.
