Vizio televisions are on display at a store in San Rafael, California, on February 13, 2024.
Justin Sullivan | Getty Images
Walmart has agreed to buy television maker Vizio, the companies announced Tuesday, as the largest U.S. retailer expands its profitable advertising business.
Walmart will acquire Vizio for $2.3 billion, or $11.50 per share, in cash. Vizio shares, which soared after reports of the deal first emerged last week, closed at $9.53 on Friday.
The major retailer announced the acquisition as it reported its fourth-quarter results.
Walmart and its Sam's Club warehouse chain have long been major sellers of Vizio devices. However, in purchasing the company, Walmart emphasized the potential to boost its advertising business through Vizio's SmartCast operating system, which allows users to stream free ad-supported content on their televisions.
In search of higher profits, the retail giant has sought to expand its Walmart Connect media business, which offers larger profit margins than selling groceries or clothing. The segment's advertising revenue increased 22% in the fourth quarter.
“We believe VIZIO’s consumer-focused operating system delivers great viewing experiences at attractive prices. We also believe it enables a profitable advertising business that scales quickly,” said Seth Dallaire, executive vice president and chief revenue officer of Walmart US, in a statement.
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