Walmart Buys Vizio

Walmart has completed its acquisition of Vizio, a deal that has been in the works since February of last year. The purchase is intended to accelerate the growth of Walmart Connect, Walmart’s retail media business in the USA, by leveraging Vizio’s SmartCast Operating System. Although Vizio has recently faced fierce competition in the TV market from Chinese rivals, the company has grown in the last five years thanks in large part to advertising revenue from its innovative and customer-centric operating system.

Walmart says that the purchase of Vizio and its SmartCast Operating System will allow the company to “serve its customers in new ways to enhance their shopping journeys” while providing advertisers with new and differentiated ways to “meaningfully connect with customers at scale and boost product discovery.” Brands will therefore achieve greater impact from their advertising investments with Walmart Connect, according to a statement from Walmart.

Vizio offers great products at great prices that customers love. They’ve always put customers at the center of their business – and that’s core to Walmart’s values and the omnichannel experiences we’re excited to roll out. Vizio has also expertly changed their business over time, like building and quickly scaling a profitable advertising business. Pairing it with Walmart Connect will be impactful and allow us to invest in our business even further on behalf of our customers.

— Seth Dallaire, Executive Vice President and Chief Growth Officer, Walmart U.S.

Since the inception of Vizio, our mission has been to provide incredible value, great technology, and award-winning innovation. Today, with the tremendous number of resources from Walmart, we will continue to further accelerate that mission around the best home entertainment experience.

— William Wang, CEO and founder of Vizio

Back in February of 2024, Walmart signed a deal to acquire Vizio and its SmartCast Operating System for $11.50 per share in cash — about $2.3 billion in total. That’s a significant investment, even for a company as massive as Walmart, which is currently valued at $726 billion and occupies the 12th spot on the list of the world’s most valuable companies. Vizio was launched as a value-focused consumer electronics company with a mission to “deliver immersive entertainment and innovative connected home devices to consumers” at prices that undercut the big names like Sony and Samsung. The company became known for its affordable TVs, though as time went on its offerings expanded into the high-performance TV segment as well. As the company began offering a wider range of devices, its smart TV operating system, SmartCast, amassed more than 19 million active accounts — up 400 percent since 2018. A big part of the appeal of this customer-centric platform is that users can stream content for free — as long as they are willing to watch ads. In a time when streaming services are getting increasingly expensive, Vizio used this foundation to create a lucrative advertising business. As it continues to grow, it allows marketers to reach even more consumers. The company’s roster of direct advertisers includes many Fortune 500 companies. According to Vizio, all of the company’s gross profit now comes from Vizio’s Platform+ segment, which consists largely of its advertising business.

So, How Does This Relate to Walmart?

Walmart operates a closed-loop, omnichannel retail media business called Walmart Connect, which reportedly grew 26 percent in Q3 of this fiscal year. (“Omnichannel” is a term used in e-commerce and retail to describe a business strategy that aims to provide a seamless shopping experience across all channels, including in-store, mobile, and online.) Walmart Connect is said to offer Walmart suppliers and sellers “attractive opportunities to reach their desired customers no matter where, how, and when they shop.” Walmart says that its Walmart Connect business experienced 60 percent advertiser growth in Q3. The acquisition of Vizio will allow Walmart to incorporate the SmartCast Operating System and its advertising platform into the Walmart Connect experience.

There is a lot to be excited about with this acquisition. 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 (will) be impactful as we redefine the intersection of retail and entertainment.

— Seth Dallaire

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. 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.

— William Wang

Walmart and Vizio will continue to operate separately, and William Wang will continue to lead Vizio as CEO. He will report directly to Walmart’s Seth Dallaire. The acquisition was unanimously approved by Vizio’s Board of Directors, and had high approval ratings among Vizio’s stockholders. It’s a good sign that Vizio’s leadership will remain in place, and that Walmart does not appear interested in ceasing the manufacture of Vizio’s popular TV and soundbar products. Although Vizio’s recent success has been tied to its operating system and advertising revenue, that system only works if Vizio’s physical devices continue to be used by customers. Just a few years ago, Vizio was the go-to brand for TVs with solid performance and relatively low prices. Now, however, rivals like TCL and Hisense have clawed their way into this important segment of the TV market, overtaking Vizio on many reviewers’ lists of the best value-oriented TVs. Will the acquisition by Walmart help or hurt Vizio’s future as a consumer electronics manufacturer? Share your thought in the related forum thread below.