Walmart in advanced talks to acquire Vizio for over $2 bn, boosting TV market control

Retail giant Walmart is reportedly in advanced discussions to acquire smart-television manufacturer Vizio for a sum exceeding $2 billion, as reported by the Wall Street Journal on Tuesday.

This potential acquisition could significantly enhance Walmart's advertising business and provide it with dominance over more than 20 per cent of the US television market.

According to the Wall Street Journal report, Vizio's shares surged by 24.6 per cent upon news of the talks, reaching their highest level since November 2022.

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Meanwhile, Walmart's shares experienced a slight decline of about 1 per cent following the report.

The proposed purchase price represents a substantial premium of nearly 30 per cent over Vizio's market capitalisation of $1.54 billion at the close of trading on Monday.

Walmart has been actively expanding its advertising reach, leveraging its vast consumer data to offer targeted ads across its various platforms, including its website and in-store digital displays.

The addition of Vizio TVs into its ecosystem could provide advertisers with more avenues to reach Walmart's massive customer base, which sees over 130 million shoppers visiting its 5,000 US stores weekly.

The rapid growth of Walmart's US ad business, known as Walmart Connect, has been highlighted by its finance chief as a significant contributor to the company's future profitability.

It is anticipated that Walmart's ad revenues will increasingly outpace traditional retail sales over the next five years, signaling a strategic shift in its revenue composition.

Vizio's active user base of nearly 18 million individuals presents a valuable asset for Walmart, potentially unlocking additional revenue streams through its software platform business.

With Vizio commanding a significant presence in Walmart's shelves and sales, an acquisition could give Walmart control over 22 per cent of the US TV market, including its private-label Onn brand and Vizio products.

Neither Walmart nor Vizio has commented on the ongoing discussions.

The news of Walmart's interest in acquiring Vizio has impacted the market, with shares of rival Roku, which also sells smart TVs and streaming devices, declining approximately 9 per cent on Tuesday.

However, it's important to note that discussions between Walmart and Vizio are ongoing, and the possibility of a deal remains uncertain.

The final decision regarding a potential sale will ultimately lie with Vizio's CEO, William Wang, who holds majority voting rights in the company.

While discussions progress, the outcome of the negotiations could reshape the landscape of the TV market and Walmart's advertising endeavours.

(With inputs from Reuters)