Walmart eyes Vizio in potential $2 Billion deal, boosting advertising power

Walmart is reportedly in talks to acquire smart TV manufacturer Vizio for more than $2 billion, according to a Wall Street Journal report. This move could significantly bolster Walmart's advertising ambitions and grant it control of a sizable chunk of the U.S. television market.

The news sent Vizio shares soaring 24.6% on Tuesday, while Walmart's stock dipped slightly. The reported offer price represents a nearly 30% premium over Vizio's market capitalization at the time.

This potential acquisition aligns with Walmart's growing focus on monetizing its vast reach and shopper data through its advertising arm, "Connect." Launched in 2021, Connect has seen rapid double-digit growth, generating $3 billion in sales last year. By adding Vizio TVs to its network, Walmart could create a targeted advertising platform reaching over 130 million weekly customers across its 5,000 U.S. stores.

The deal would grant Walmart access to Vizio's user base of nearly 18 million and its lucrative software platform business, which boasts high margins and strong advertising revenue growth. This would further diversify Walmart's income streams, moving beyond everyday essentials and towards higher-margin advertising solutions.

The potential acquisition comes at a time when retailers' ad networks (RMNs) are gaining traction as traditional giants like Apple and Google restrict third-party data sharing. RMNs are expected to become a $60 billion industry in 2024, and Walmart is clearly aiming to be a major player.

However, concerns remain about the future of Vizio products if the deal goes through. Would they continue to be available outside of Walmart stores? This question might negatively impact Roku, a competitor selling smart TVs and having an existing exclusive deal with Walmart.

It's important to note that discussions are ongoing, and a final agreement is not guaranteed. Ultimately, the decision rests with Vizio's CEO, William Wang, who holds majority voting rights in the company.

William Wang is a Taiwanese American billionaire entrepreneur who co-founded the company in 2002.