Walmart has confirmed rumors that first emerged last weekend that it intends to buy the U.S. TV maker Vizio, saying it has negotiated a deal worth $2.3 billion to acquire the company. Though the acquisition gives Walmart an established, premium TV brand, the deal is about more than just strengthening its TV hardware lineup with more advanced models.
Seth Dallaire, Walmart’s executive vice president and chief revenue officer, said in a statement that Vizio’s customer-centric operating system provides “great viewing experiences at attractive price points. We also believe it enables a profitable advertising business that is rapidly scaling.”
Vizio makes relatively affordable, yet fairly advanced TVs and soundbars, but it’s the SmartCast operating system and device ecosystem that may well provide the most value to Walmart, having grown to more than 18 million active customer accounts.
It’s a very established platform that could well prove very useful to Walmart’s advertising ambitions, making it more able to compete with rivals such as Amazon, which has built up an ad business with a truly global reach.
While Walmart is often associated with hardware and consumer products, it has plenty of services it provides that it wants to advertise, such as the Walmart+ subscription service. Among other things, Walmart+ provides access to video streaming content through Paramount+, similar to how Amazon’s Prime subscription gives users access to the Amazon Prime Video streaming service.
Walmart was quite open about its advertising plans, but it’s less clear what the acquisition means for its existing TV business and Vizio’s own line of TVs. Walmart sells TVs under its Onn brand, which is much less well known that Vizio and is focused on very affordable models. Onn also sells cheap soundbars, headphones, tablets, bluetooth speakers and such. It remains to be seen if Vizio will be absorbed into the Onn brand. Perhaps it’s more likely that Onn will be incorporated into the Vizio brand. Alternatively, the company could keep going with two different brands. Perhaps, Vizio will become its premium TV range, while Onn remains focused on more affordable sets.
In any case, the deal will likely mean Walmart shoppers in the U.S. will see a much wider selection of Vizio TV models in the company’s stores before too long. That said, the company hasn’t said when it expects the acquisition to close, so it may well be a few months before that happens.
