Walmart intends to pay around $2.3 billion for TV maker Vizio. Rumours of the transaction surfaced last week, and today the retail behemoth confirms the acquisition as part of a strategy to grow its advertising business.
“The acquisition of Vizio and its SmartCast Operating System (OS) would enable Walmart to connect with and serve its customers in new ways including innovative television and in-home entertainment and media experiences,” according to a news statement issued by Walmart. “It would also create new opportunities to help advertisers connect with customers, empowering brands with differentiated and compelling opportunities to engage at scale and to realise greater impact from their advertising spend with Walmart.”
Vizio has over 500 direct advertising agreements, courtesy to its Vizio Platform Plus division, which the firm claims “now accounts for the majority of the company’s gross profit.” SmartCast, Vizio’s smart TV OS, is also utilised by over 18 million active users.
Walmart already has an in-house TV brand called Onn, but purchasing Vizio would allow the store to compete more effectively with inexpensive smart TVs like Amazon and Roku. Walmart already worked with Innovid last year to broadcast personalised advertisements on TVs, as well as with Roku for “shoppable ads” that allow customers to purchase Walmart products straight from their TVs.
Walmart’s proposed acquisition of Vizio will be subject to the standard regulatory approvals, and it might be terminated within 45 days if Vizio gets a “superior offer.” The purchase comes months after Vizio overhauled its TV software, resulting in a more contemporary homescreen experience for its TVs. As Vizio competes against rivals like as Hisense, TCL, and low-cost Roku TVs, software difference will become increasingly crucial.
“We feel that this is the best next chapter in Vizio’s history. “By combining our capabilities and resources, we will drive innovation and add even more value to our customers,” adds Vizio CEO William Wang. “Walmart’s approach is aligned with Vizio’s mission and vision, and our technology will help bring a scaled, connected TV advertising platform to Walmart Connect.”