iStock.com/Michael Vi
Walmart To Acquire TV Maker Vizio for $2.3 Billion To Expand Its Ad Business
February 21, 2024
On Tuesday, Walmart and Vizio announced that they made a deal for the retail giant to acquire the TV maker for $11.50 per share, in cash, which amounts to around $2.3 billion.
After reports of this potential acquisition were shared last week, Vizio’s shares shot up. According to CNBC, they closed at $11.08 on Tuesday after another 16% hike.
For a long time, Walmart and its Sam’s Club warehouse chain have been big sellers of Vizio products. However, through this acquisition, Walmart is attempting to strengthen its ad business by leveraging Vizio’s SmartCast Operating System. This system enables users to stream free ad-supported content directly on their TVs. Walmart aims to take advantage of this system to expand its media business Walmart Connect.
According to a report from Insider Intelligence, Walmart Connect, which distributes ads utilizing shopper data across in-store digital displays, connected TVs, radio, and its website, has experienced double-digit growth since its inception in 2021 and grew 30% for fiscal year 2024. This high-margin business generated approximately $3 billion in revenue last year, although it lags significantly behind Amazon’s $35 billion in ad revenues.
President and CEO Doug McMillon said, “When you grow your digital reach, and you’ve got an e-commerce business that’s scaling like ours is, you get an opportunity to sell advertisements, and we can connect the dots for advertisers.”
In a statement, Seth Dallaire, executive vice president and chief revenue officer of Walmart U.S., said, “There is a lot to be excited about with this acquisition. We believe Vizio’s customer-centric operating system provides great viewing experiences at attractive price points. We also believe it enables a profitable advertising business that is rapidly scaling. Our media business, Walmart Connect, is helping brands create meaningful connections with the millions of customers who shop with us each week. We believe the combination of these two businesses would be impactful as we redefine the intersection of retail and entertainment.”
Walmart’s ownership of the Vizio platform will extend the reach for companies advertising with the retailer. According to the company’s announcement, Walmart stated that Vizio’s SmartCast system boasts 18 million active accounts.
The retailer also said that the acquisition enables it to “connect with and serve its customers in new ways including innovative television and in-home entertainment and media experiences.”
Walmart’s earnings report on Tuesday revealed strong performance for the company for Q4 and FY24. McMillon said, “Our team delivered a great quarter, finishing off a strong year. We crossed $100 billion in eCommerce sales and drove share gains as our customer experience metrics improved, even during our highest volume days leading up to the holidays. We’re proud of the team and excited about building on our momentum as we work to bring prices down for our customers and members.”
Recent News
Media Giants Depend on Sports As Content Shortages Rise
As Hollywood emerges from last year’s strikes, major media companies are turning to live sports to attract audiences and advertisers. This trend was evident during this year’s Upfront presentations, where media giants showcased their upcoming content and advertising opportunities.
New Trader Joe’s Opens in SF After 10 Years
San Francisco’s Hayes Valley neighborhood welcomed a highly anticipated new addition on May 17, 2024, with the grand opening of a Trader Joe’s at 555 Fulton St., on the corner of Laguna Street. This event marks the end of a decade-long wait for residents who have been eagerly looking forward to a new grocery store in their area.
China’s Property Market Boost: Stocks Surge, Copper Hits Highs
The Chinese government unveiled a comprehensive support package that has sent ripples through financial markets. This initiative includes a slew of measures aimed at stimulating housing demand and addressing the excess inventory burdening developers. The immediate impact was a significant rally in Chinese stocks and a surge in commodity prices, notably copper, which hit record highs.
Mercedes-Benz Workers in Alabama Reject Union
In a pivotal moment for autoworkers in the southern United States, employees at a Mercedes-Benz plant in Alabama have voted against joining the United Auto Workers (UAW) union. The outcome, with 56% of workers voting against unionization and 44% in favor, comes as a significant setback for the UAW’s efforts to expand its influence in the region.