Walmart Appears to Be Currently in Negotiations for a Billion-Dollar Acquisition of Smart TV Maker VIZIO. According to reports from the news agency Reuters based on the Wall Street Journal (WSJ), the leading US supermarket chain is currently negotiating the purchase of the Smart TV manufacturer VIZIO. This planned acquisition would allow Walmart to strengthen its advertising business while simultaneously gaining control of over a fifth of the US television market.

Here's the translation:

The reported acquisition price of over 2 billion US dollars is almost 30 percent above the current market capitalization of VIZIO, which was around 1.54 billion US dollars on Tuesday. VIZIO's investors welcomed the news with enthusiasm: The company's shares closed on Tuesday on the New York Stock Exchange with a gain of 24.6 percent.

Walmart shareholders, on the other hand, seem less enthused by the speculation: their shares remained stable at the stock exchange on Tuesday. On Wednesday, however, VIZIO's stock recorded a decline of 0.97 percent to 9.66 US dollars. These discussions are taking place at a time when Walmart is expanding its presence and leveraging its extensive customer database to sell advertising both on its website and in its stores.

This includes the switching off of digital displays, connected televisions, and radio advertising. Including VIZIO TVs would offer other companies the opportunity to present their advertising to the more than 130 million weekly customers who shop at the 5,000 US Walmart stores, as reported by Reuters.

For advertisers, the retail advertising business (also known as Retail Media Networks or RMN) is becoming increasingly attractive as traditional providers like Apple and Google severely restrict access to third-party data. As a result, the RMN segment is the fastest-growing in the US advertising industry and is expected to generate revenue of around 60 billion US dollars this year, according to Reuters estimates.

Walmart's U.S. Advertising Business, Known as Connect, Has Seen Double-Digit Growth Since Its Launch in 2021. Walmart's CFO Sees It as One of the Most Profitable and Fastest-Growing Business Segments, Which Will Have a Significant Impact on the Company's Income Statement Over the Next Five Years, Reuters Said.

He also emphasizes that a larger portion of future profitability is expected to come from the sale of advertisements on Walmart-owned properties, compared to the sale of everyday products like milk and toilet paper, for which the company has been known thus far. The acquisition of VIZIO would grant Walmart access to an active user base of nearly 18 million people while also helping to tap into VIZIO's own software platform business.

According to Nicholas Zangler, Analyst at Stephens, this business records annual advertising revenues of over 27 percent and a margin of more than 60 percent. VIZIO is the leading supplier for Walmart and about 70 percent of its televisions are sold through this retailer, the expert continued. With the acquisition of VIZIO and Walmart's own Onn brand, the company could potentially have a controlling share of 22 percent of the entire US television market.

Both Walmart and VIZIO Declined to Comment to Reuters. According to the WSJ Report, Which Cites Informed Sources, Negotiations Between the Two Parties are Not Yet Concluded and There is a Possibility That No Deal Will Materialize.