Walmart has finalized its acquisition of popular television maker Vizio in a deal valued at $2.3 billion, signaling a significant move to bolster its advertising capabilities.

The deal, initially announced in February 2024, was completed after regulatory review, making Vizio a wholly owned subsidiary of the retail giant.

The acquisition is part of Walmart’s strategy to expand its Walmart Connect advertising platform, aiming to better compete with industry leaders like Amazon, Google, and Roku. Through the integration of Vizio’s Smart TVs and its proprietary SmartCast operating system, Walmart intends to merge retail and entertainment, leveraging customer data to deliver personalized advertising and shopping experiences.

Integration to Lead in Connected TV Advertising

With the acquisition, Walmart gains control over Vizio’s SmartCast operating system and its WatchFree+ streaming service. This integration will enable Walmart to combine customer viewing habits with its extensive retail data, offering advertisers a potent platform to target consumers effectively.

“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,” said Seth Dallaire, Walmart U.S.’s executive vice president and chief growth officer. “Pairing it with Walmart Connect will allow us to invest further on behalf of our customers.”

This approach will see Vizio TVs likely featuring an increased number of Walmart ads, promoting a seamless link between entertainment and commerce. Walmart intends to provide advertisers with a larger and more engaged audience by capitalizing on Vizio’s 19 million active SmartCast accounts.

Vizio’s transition from a TV manufacturer to an advertising-driven business over the years aligns with Walmart’s vision. Vizio’s ad platform, known for its vast advertiser network, includes Fortune 500 companies and has become a central revenue stream. Walmart aims to enhance this ecosystem by offering advertisers unique insights derived from the intersection of TV and retail data.

Consumers, on the other hand, may see an increasingly personalized shopping journey, with product recommendations and tailored promotions delivered through their Vizio smart TVs.

William Wang, CEO of Vizio, emphasized the potential for innovation saying: “With the tremendous resources from Walmart, we will continue to accelerate our mission of delivering incredible value and award-winning innovation to customers.”

Financial and Operational Details

The all-cash deal saw Walmart pay $11.50 per share, valuing Vizio at $2.3 billion. As part of the agreement, Vizio’s common stock will no longer be listed on the NYSE, and the company’s operations will now be reported under Walmart’s U.S. segment.

To fund the acquisition, Walmart will use a mix of cash and debt. Despite transaction-related costs, the company expects the internal rate of return (IRR) from the deal to surpass its reported return on investment. However, Walmart projects the acquisition will be slightly dilutive to its earnings per share in fiscal 2025 and 2026.

For now, Walmart and Vizio will operate independently, with William Wang continuing as Vizio’s CEO under the oversight of Seth Dallaire. This arrangement allows Vizio to maintain its identity while aligning its operations with Walmart’s broader strategic goals.

This acquisition underscores Walmart’s intent to lead in the fast-growing connected TV advertising market. Walmart Connect, which experienced 26% growth in Q3 2024, has already proven itself as a key driver for the company. With Vizio in its portfolio, Walmart is set to accelerate growth further, offering advertisers innovative solutions to engage with customers across multiple channels.