Walmart US CEO John Farner joins “The Big Money Show” to share developments with the retail giant, including the opening of 150 new stores in the United States.
Walmart announced Tuesday that it will acquire smart TV maker Vizio for $2.3 billion, with the aim of boosting retail giant Vizio’s fast-growing advertising business.
“There is a lot to be excited about with this acquisition,” said Seth Dallaire, executive vice president and chief revenue officer, Walmart US. “We believe in providing a great viewing experience. And we believe in that.” Enable a rapidly expanding and profitable advertising business. ”
A shopping cart outside a Walmart store on August 13, 2023 in Richmond, California. (David Paul Morris/Bloomberg via Getty Images/Getty Images)
“Our media business, Walmart Connect, helps brands build meaningful connections with the millions of customers who shop with us each week,” Dallaire continued. “He believes the combination of these two businesses will have a major impact in redefining the intersection of retail and entertainment.”
Walmart’s offer to buy Vizio for $11.50 a share in cash is another bet on the company’s fast-growing U.S. advertising business, with ad sales of 2.22% in the quarter ending January 31st. %, boosting profits more than the traditional grocery business.
Walmart to acquire Vizio for $2.3 billion, sales forecast, dividend increase rate
It also aligns with Walmart’s efforts to change the mix of its revenue streams over the next five years, with more of its future revenue coming from advertising sales at Walmart properties rather than sales of everyday items like milk and toilet paper. It’s a plan.
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| WMT | Walmart Co., Ltd. | 175.92 | +5.53 | +3.25% |
The acquisition of Vizio could allow the retail giant to build a vast panel of connected TV users through owning and operating Vizio smart TVs and Vizio’s SmartCast operating system, giving it more space to sell advertising, Sensor Tower said. .
Walmart said it is attracted to Vizio’s growing device ecosystem and SmartCast, the company’s smart TV operating system, which has grown nearly 400% since 2018 and amassed more than 18 million active accounts. Ta.
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Stevens analysts expect Vizio to generate nearly $600 million in software/ad revenue in 2023.
“We believe global advertising and (Walmart Plus) memberships alone will account for 20% of our annual operating income in 2025,” Walmart Chief Financial Officer John David Rainey said on a conference call. Stated.
“These revenue streams allow us to fund investments in our core businesses while also expanding our operating margins.”
Vizio and Phillips TV displays seen at stores in Florida. Walmart announced Tuesday that it will acquire Vizio in a $2.3 billion deal. (Jeffrey Greenberg/Universal Images Group via Getty Images/Getty Images)
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| VZIO | Vizio Holdings | 11.03 | +1.50 | +15.69% |
Walmart’s offer price is a 47% premium over Vizio’s closing price of $7.82 on February 12, the day before reports of takeover talks surfaced. Vizio stock rose about 15.5% to $11.01 on Tuesday.
“This trade makes sense,” said Brian Mulberry, client portfolio manager at Zacks Investment Management, which owns Walmart stock.
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“I’m not at all surprised that Wal-Mart wants to enter the same competitive arena[of retail advertising]simply because there’s so much money available,” he said.
Reuters contributed to this report.
