Walmart has agreed to pay $2.3 billion to acquire smart TV maker Vizio. The move is a move to shore up the retailer’s burgeoning advertising business to compete with rival Amazon.
But analysts say the deal is seen as bad news for Roku. Roku also sells smart TVs and streaming devices, and he has an exclusive agreement with Walmart to sell products offered by Walmart on Roku devices.
Roku stock was down nearly 7% at the start of Tuesday trading on Wall Street.
The nation’s largest retailer plans to acquire Vizio in an all-cash deal valued at $11.50 per share.
Vizio stock was trading around $10.98 per share in pre-market trading Tuesday, more than 15% higher than Friday’s closing price of $9.53.
Walmart also announced its fourth quarter results on Tuesday. The company reported a 4% year-over-year increase in store sales for the three months to the end of January.
The company also announced that the number of transactions increased by 4.3% and its e-commerce business increased by 17%.
Walmart stock was also poised to soar before Wall Street’s opening bell on Tuesday. The company’s shares were trading up about 3% in pre-market trading.
Adding Vizio TV could give companies like JM Smucker and Kraft Heinz more screens to display ads to the more than 130 million shoppers who visit Walmart’s 5,000 stores each week. be.
Seth Dallaire, Walmart’s chief revenue officer, said Vizio’s appeal is its “customer-centric operating system” that “offers a great viewing experience at an attractive price point.”
Dallaire said the company envisions a symbiotic collaboration between Vizio and Walmart Connect, the retailer’s media arm, as a result of the acquisition.
Connect has experienced rapid double-digit growth since its launch in 2021, with revenue of about $3 billion last year, according to a report from Insider Intelligence.
“We believe the combination of these two businesses will have a significant impact in redefining the intersection of retail and entertainment,” said Dallaire.
According to Walmart, Vizio’s SmartCast operating system has accumulated more than 18 million active accounts.
The acquisition will allow companies that advertise on Walmart to reach more potential customers.
“By combining our capabilities and resources, we can drive innovation and create even more value for our customers,” said Vizio CEO William Wang.
Wang predicted that Vizio’s technology “will help Walmart Connect bring a large-scale connected TV advertising platform.”
“This transaction creates immediate and compelling value for Vizio shareholders and is a true testament to the hard work of the entire Vizio team.”
with post wire
