BENTONVILLE, Ark., and IRVINE, Calif.—In a deal that is likely to have important implications for the streaming, online retail and CTV ad business, Walmart has reached an agreement to acquire Vizio for $11.50 per share in cash, or about $2.3 billion.
Walmart has been a major retailer for Vizio TVs for many years and the acquisition would give it greater control over both the Vizio TVs and Vizio’s large CTV ad business.
In announcing the deal Walmart stressed that the acquisition of Vizio and its SmartCast Operating System (OS) would accelerate growth of its Walmart Connect ad business through Vizio’s SmartCast Operating System. The Walmart Connect closed-loop omnichannel media advertising business, grew 30 percent for fiscal year 2024.
Further highlighting the importance of CTV ad opportunities in driving the deal, the companies also noted that advertising revenue from Vizio’s operating system accounted for the majority of Vizio’s growth in the last five years
“There is a lot to be excited about with this acquisition,” said Seth Dallaire, executive vice president and chief revenue officer, Walmart U.S. “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.”
The deal will could also strengthen Walmart's competitive position against Amazon and put increased pressure on Roku and other competitors in the smart TV and CTV businesses, ad executives said.
In recent years, Vizio’s growing device ecosystem and its Smart TV operating system, SmartCast, have amassed over 18 million active accounts growing approximately 400 percent since 2018. The company has used that market presence to grow a major CTV ad business. Vizio’s platform currently has over 500 direct advertiser relationships, including many of the Fortune 500. Vizio’s Platform+ business, which consists largely of its advertising business, now accounts for a majority of the company’s gross profit.
“We believe this is the ideal next chapter in Vizio’s history. By bringing our capabilities and resources together, we’ll drive innovation and create even more value for our customers,” said William Wang, chief executive officer of Vizio. “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.”
Outside reaction also highlighted the opportunities in the ad sector that the deal opens up.
“By acquiring Vizio, Walmart has access both to the actual TV hardware and to the Vizio operating system,” said Ken Suh, CSO, Nexxen (formerly Tremor). “The operating system…is key because it is in the home and collects the ACR [automatic content recognition] data that tells you what people are watching but also what they do on their TV – for example, it's not just I watch the Super Bowl, it's that I actually play casual games on my TV. This ACR data provides very powerful targeting capabilities which Amazon doesn’t have at Vizio’s scale for Walmart Connect to actually start to compete with some of the other companies out there.”
“All in, it’s a really smart deal because Walmart can essentially give the Vizio TVs away for really low prices to gain the distribution network of data for powering their ACR data,” he added.
Alex Yip, AppsFlyer director of product, CTV, AppsFlyer described “the acquisition of Vizio by Walmart” as “a game-changer for the retail and streaming sectors.”
“Walmart is not only adding a popular private label TV brand to its portfolio, but also gaining access to a huge amount of first-party consumer data that will enhance its advertising and streaming capabilities,” he said. “The company will be able to leverage Vizio’s SmartCast platform to promote its own products and services, such as Walmart+, as well as sell more targeted ads to third-party advertisers who want to reach Walmart’s customers. Walmart+ has already seen the development of really smart and successful partnerships with Paramount+, Roku, TikTok, NBCUniversal and others, and it will be interesting to see how this potential deal affects those existing relationships.”
“At the end of the day, this is about competing with Amazon,” he said. “Whether Walmart decides to start producing its own streaming content or partnering with other providers will be interesting to see and this reminds me of Apple's foray into the market -- which has ended up with Emmys and Oscars wins for the brand. This deal will help Walmart diversify its revenue sources, increase its customer loyalty, and challenge Amazon’s dominance in the e-commerce and streaming sectors.”
Per Walmart, other key aspects of the transaction include:
- The transaction is subject to regulatory clearance and other closing conditions specified in the merger agreement.
- Vizio’s Board of Directors has unanimously approved the transaction.
- Vizio stockholders (including Mr. Wang and his affiliates) holding approximately 89% of the voting power of Vizio’s outstanding common shares have approved the transaction. No other stockholder approval is required to complete the transaction.
- Vizio has the right to terminate the transaction within a 45-day period if, subject to the terms and conditions of the merger agreement, Vizio receives and accepts a “Superior Offer” as defined in the merger agreement.
- Upon completion of the transaction, Vizio’s Class A common stock will no longer be publicly listed.
- Due to certain transaction-related costs associated with the acquisition, including for talent retention and technology integration, Walmart expects the transaction to be slightly dilutive to EPS in the near term.
- To finance the acquisition, Walmart plans to use cash and/or debt. The transaction is not subject to a financing condition.
- IRR for this transaction is expected to be ahead of Walmart’s reported ROI.
- Following the completion of the transaction, Vizio’s business will be reported as part of the Walmart U.S. segment.
