Proactive Investors - Walmart Inc (NYSE:WMT) is in discussions to acquire smart television manufacturer Vizio for over US$2 billion, according to reports by the Wall Street Journal.
An added benefit of the deal is it would provide Walmart with a new place in its stores to advertise and market products to customers.
Walmart’s advertising business Connect was launched in 2021 and has grown at a double-digit rate, generating revenues of around US$3 billion last year.
If Walmart was to buy Vizio it would have a greater number of television screens around its stores for advertisers like Kraft Heinz (NASDAQ:KHC) and JM Smucker to use.
Historically, Walmart and its Sam’s Club chain have been the biggest customers of Vizio products, which typically provide the largest portion of TV sales at its stores.
Talks are still underway and while a deal is possible it isn’t certain, reports added.
Vizio shares rallied 25% on the back of the reports, while Walmart stayed flat.
The acquisition would also provide Walmart access to Vizio's user base and its profitable software platform, further diversifying Walmart's revenue streams beyond traditional retail sales.
Advertising revenues have been a key target for the supermarket as it competes with rivals like Amazon (NASDAQ:AMZN).
Along with dominating the e-commerce industry, Amazon is also one of the largest ad players after Google’s Alphabet (NASDAQ:GOOGL) and Meta (NASDAQ:META) Platforms.
With retail media networks becoming increasingly vital for advertisers, Walmart's potential ownership of Vizio would mark a pivotal step in its expansion into the digital advertising domain.