US-based multinational retail giant, Walmart, is reportedly in talks to buy smart television manufacturer, Vizio, for over $2 billion, in an acquisition that could bolster Walmart’s advertising business and grant it control of over a fifth of the U.S. television market.
Following reports from the Wall Street Journal about the ongoing deal, Vizio shares surged, closing up 24.6% on Tuesday and briefly reaching their highest level since November 2022 with a 36% surge. Equally, Walmart’s shares experienced a slight decline of about 1%. The reported offer price represents a nearly 30% increase over Vizio’s market cap of $1.54 billion at Monday’s close.
Walmart’s interest in acquiring Vizio aligns with the retail giant’s plans to leverage its expansive reach and vast shopper data to sell advertisements across its various platforms. The platforms include its website and store assets such as digital displays, connected TVs, and radio.
Acquiring Vizio would provide Walmart with access to an active user base of nearly 18 million people. Furthermore, Vizio holds the top shelf-share position at Walmart, with nearly 70% of its TVs sold through the retailer. If the acquisition were to proceed, Walmart could potentially control 22% of the US TV market between its private-label Onn brand and Vizio.
However, discussions between Walmart and Vizio are ongoing, and a deal is not guaranteed. The final decision rests with Vizio’s CEO, William Wang, who founded the company in 2002 and holds majority voting rights.
The potential acquisition poses a challenge to Roku, which also sells smart TVs and streaming devices. Roku shares fell about 9% on Tuesday following the news, as it currently has an exclusive deal with Walmart to sell products fulfilled by Walmart on Roku devices.
It remains uncertain whether Vizio products would continue to be available outside of Walmart if a deal is finalised.
