Walmart said it agreed to buy smart TV set maker Vizio for $2.3 billion.
Walmart plans to use Vizio’s SmartCast TV operating system as a way to connect with customers at a time when retail media spending is exploding.
“There is a lot to be excited about with this acquisition,” said Seth Dallaire, executive VP and chief revenue officer, Walmart U.S.
Also Read: Analyst Says Walmart Buying Vizio Could ‘Disrupt’ Smart TV Market
“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,” Dallaire said. “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 Connect is the retailer’s media business, which offers brands a closed-loop look at how media spending impacts retail sales.
The combination of Vizio's viewer data and Walmart’s shopping data could create a player in the connected TV market strong enough to compete with online retailer Amazon and other streaming powerhouses like YouTube and Roku.
Vizio has been barely breaking even on selling TV sets — Walmart is its biggest retailer — but has been growing its data and advertising business.
The Platform Plus business now accounts for a majority of Vizio’s profit.
“We believe this is the ideal next chapter in Vizio’s history,“ Vizio founder and CEO William Wang said. “By bringing our capabilities and resources together, we’ll drive innovation and create even more value for our customers. 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. This transaction delivers immediate and compelling value to Vizio stockholders and is a true testament to the hard work of the entire Vizio team.”
The deal calls for Walmart to pay $11.50 per share in cash for Vizio.
Vizio’s board has approved the deal unanimously. Shareholders holding about 89% of the company’s votes — including Wang — have also approved the transaction.
Because of some transaction-related costs associated with the acquisition, including for talent retention and technology integration, Walmart expects the transaction to be slightly dilutive to earnings per share in the near term.
Following the completion of the transaction, Vizio’s business will be reported as part of the Walmart U.S. segment.
