US Markets
Tuesday, February 20th, 2024 5:14 pm EDT
Key Points
- Walmart is acquiring Vizio for $2.3 billion in cash, aiming to bolster its high-profit advertising business.
- The acquisition signals Walmart’s strategic move to leverage Vizio’s SmartCast Operating System for expanding its media business, Walmart Connect, which saw a 22% growth in advertising sales in the fourth quarter.
- Walmart anticipates gaining greater advertising reach and offering innovative entertainment experiences through its control of Vizio’s platform, with 18 million active accounts on the SmartCast system.
Walmart’s recent announcement to purchase TV manufacturer Vizio for $2.3 billion, or $11.50 per share in cash, marks a strategic move for the retail giant, aimed at bolstering its lucrative advertising business. The acquisition, disclosed alongside Walmart’s fourth-quarter earnings report, reflects the company’s desire to leverage Vizio’s SmartCast Operating System to enhance its ad revenues. With Vizio’s SmartCast OS enabling users to access free ad-supported content on their TVs, Walmart sees an opportunity to expand its media business, Walmart Connect, which boasts higher profit margins compared to traditional retail sectors like groceries or clothing. Seth Dallaire, Walmart U.S.’s executive vice president and chief revenue officer, emphasized Vizio’s customer-centric approach and the potential for a profitable advertising venture. This acquisition aligns with Walmart’s broader strategy to compete with Amazon’s burgeoning advertising segment. By acquiring Vizio, Walmart gains control over a platform with 18 million active accounts, thereby extending its advertising reach and offering new avenues for innovative television and in-home entertainment experiences. The market responded positively to the news, with Vizio’s shares experiencing a 15% surge during early trading following the announcement, reflecting investor confidence in the potential synergies between the two companies.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/20/walmart-agrees-to-buy-vizio-to-grow-ad-business.html
