Walmart has entered into an agreement with Vizio Holding Corp. to acquire the California-based smart TV and SmartCast TV operating system brand for US$2.3 billion, or US$11.50 per share in cash.
As per the acquisition terms, Walmart would acquire both the Vizio brand and the SmartCast operating system. With SmartCast, Vizio TV owners can stream content, control and customize the TV experience, and cast media from a mobile device to a TV. Content can be streamed for free with one catch: you have to view ads.
Walmart says the acquisition would not only allow the retailer to offer enhanced products and experiences to customers but would also create new opportunities for advertisers. Walmart says it will also help expand the Walmart Connect media business in the U.S., combining Vizio’s advertising solutions business with Walmart’s reach. Naturally, Walmart will also sell Vizio TVs.
“There is a lot to be excited about with this acquisition,” says 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.”
Vizio was founded in 2002, and since launching SmartCast in 2016, the smart TV platform has acquired more than 18 million active accounts. Once integrating ads into the platform, Vizio created its own advertising business. The company has more than 500 direct advertiser relationships, including with many Fortune 500 companies. The Platform+ business, which consists largely of its advertising business, now accounts for a majority of Vizio’s gross profit.
“We believe this is the ideal next chapter in Vizio’s history,” says William Wang, CEO of Vizio. “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.”
Walmart Connect, the retailer’s closed-loop omnichannel media business, grew 30% for fiscal year 2024. The business offers Walmart suppliers and sellers opportunities to reach their desired customers.
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, including stockholders (including Wang and his affiliates) who hold approximately 89% of the voting power of Vizio’s outstanding common shares. 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.