Walmart plans to buy this TV company that may make it a major player in the US TV market

Walmart

is reportedly planning to buy a popular TV brand in the US. According to a report from the Wall Street Journal, via news agency Reuters, Walmart is currently engaged in discussions to purchase

Vizio

, a prominent smart-television manufacturer, for a staggering sum exceeding $2 billion. This strategic move could also significantly enhance Walmart’s advertising endeavors and potentially grant the retail giant control over more than 20% of the

US TV market

.

Founded by William Wang in 2002, Vizio has long regarded Walmart as its largest customer and historically dominated Walmart’s television sales, as per sources familiar with the situation cited in the WSJ report.
What Vizio buy means for Walmart
This acquisition would position Walmart as a major player in the US TV market, accounting for approximately 22% of all TVs sold. This share would encompass both Walmart’s private-label brand and Vizio’s offerings.

The proposed acquisition price stands at nearly 30% above Vizio’s market capitalization of $1.54 billion, as of the previous day’s closing.
Walmart’s shift in focus toward higher-margin ventures includes Walmart Connect, its retail media advertising division. This platform enables brands to deliver targeted advertisements to Walmart shoppers across various channels, including the company’s website, in-store displays, connected TVs, and radio.

Since its launch in 2021, Walmart’s advertising business has consistently achieved double-digit growth, amassing sales of approximately $3 billion last year, as reported by Insider Intelligence.
Should the deal go through, Walmart would gain access to Vizio’s substantial user base of nearly 18 million people. Additionally, ownership of Vizio would unlock the potential of its software platform business, which boasts impressive 60% profit margins and an annual advertising revenue growth rate of 27%, according to insights from analyst Nicholas Zangler at Stephens.
Bad news for Roku
However, this development spells trouble for Roku, another player in the smart TV and streaming device market. Roku’s exclusive arrangement with Walmart to sell products fulfilled by the retail giant on Roku devices has led to a 9% decline in Roku’s shares on Tuesday.