Walmart to acquire VIZIO for $2.3bn to expand into cybersecurity and media

Walmart Inc. and VIZIO Holding Corp. have announced a groundbreaking agreement, with Walmart set to acquire VIZIO for $11.50 per share in cash. This deal translates to a fully diluted equity value of approximately $2.3 billion, positioning Walmart to significantly enhance its footprint in the cybersecurity and in-home entertainment sectors. This acquisition is not just a transaction but a strategic move that enables Walmart to innovate how it connects with and serves its customers, offering new dimensions in television, in-home entertainment, and media experiences.

The integration of VIZIO and its SmartCast Operating System (OS) with Walmart’s operations is expected to revolutionize the retail and entertainment industries. By leveraging VIZIO’s customer-centric operating system, Walmart aims to offer great viewing experiences at attractive price points, further bolstering its advertising business that is rapidly scaling. Walmart Connect, the company’s media business, is set to benefit significantly, merging VIZIO’s advertising solutions business with Walmart’s expansive reach and capabilities. This combination is anticipated to accelerate Walmart Connect’s growth in the U.S., fueled by the expansion of connected TV platforms and Walmart’s leadership in TV panel sales.

Seth Dallaire, Walmart’s Executive Vice President and Chief Revenue Officer, expressed enthusiasm about the acquisition, highlighting the complementary nature of VIZIO’s operating system and Walmart Connect. William Wang, CEO of VIZIO, also remarked on the synergy between the two companies, emphasizing that the merger will drive innovation and deliver value to VIZIO stockholders.

Since its inception in 2002, VIZIO has been committed to providing immersive entertainment and innovative connected home devices. With over 18 million active accounts on its Smart TV operating system, SmartCast, VIZIO has seen approximately 400 percent growth since 2018. Its advertising business, buoyed by over 500 direct advertiser relationships, has become a major contributor to the company’s gross profit.

The transaction, which is subject to regulatory approval and other closing conditions, has already received unanimous approval from VIZIO’s Board of Directors. Walmart expects the acquisition to be slightly dilutive to EPS in the near term, due to transaction-related costs, but plans to finance the acquisition through cash and/or debt. The deal promises to align with Walmart’s ROI expectations and will see VIZIO’s business reported under the Walmart U.S. segment upon completion.

The acquisition of VIZIO by Walmart represents a significant leap forward in integrating retail with entertainment and media. It reflects a strategic alignment with the evolving consumer preferences for connected home and entertainment solutions. This merger underscores Walmart’s commitment to leveraging technology to enhance customer experience and advertising efficacy. As the digital landscape continues to evolve, the Walmart-VIZIO synergy could redefine the standards for retail and entertainment convergence, setting a benchmark for future innovations in the sector.