Walmart Closes Deal For Smart TV Firm Vizio For $2.3B, Altering Streaming Ad Landscape – Update

UPDATED, 12:40 PM: Walmart‘s $2.3 billion acquisition of smart TV manufacturer Vizio and its SmartCast operating system closed Tuesday. The deal allows Walmart to collect Vizio’s automatic content recognition data to bolster advertising and positions the retail giant to be a bigger force in the connected TV world.

“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,” Seth Dallaire, Walmart U.S.’ EVP and Chief Growth officer, said in a statement. “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.”

Read details of the acquisition below.

PREVIOUSLY, February 20: Retail giant Walmart is acquiring smart TV maker Vizio for $2.3 billion in a deal that will alter the streaming advertising landscape.

While Vizio is a leading manufacturer of televisions, rivaling Samsung for supremacy in North America, Walmart is not mainly interested in its hardware business, however. Instead, it has coveted Vizio’s SmartCast Operating System, which has 18 million active accounts to be targeted by advertisers. With Amazon knitting together e-commerce and streaming ads with increasing potency, Walmart identified an opportunity in Vizio to counter-attack.

Walmart has had phases of interest in the U.S. media business, selling its Vudu streaming subsidiary to NBCUniversal’s Fandango in 2020 after a 10-year run.

Given that Walmart is a top retailer of smart TVs, integrating Vizio should be a more streamlined process than building out Vudu. It also sends a shot across the bow of Roku, whose interface is in one-third of all smart TVs in North America. The company will now face another scaled competitor for streaming ad dollars. Shares in Roku, which plunged 24% last Friday in the wake of a mixed quarterly earnings report, slid another 5% in premarket trading today on the Walmart-Vizio news.

“There is a lot to be excited about with this acquisition,” said Seth Dallaire, EVP 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. Its smart TV operating system, SmartCast, has surpassed 18 million active accounts, growing about 400% since 2018. Advertising 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,” Vizio CEO William Wang said. “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.”