Walmart (WMT.N) is in talks to buy smart-television manufacturer Vizio (VZIO.N) for more than $2 billion, the Wall Street Journal reported on Tuesday, in a move that could bolster its advertising business and give it control of more than a fifth of the U.S. TV market.
Vizio shares closed up 24.6% on Tuesday. They briefly surged 36% to their highest since November 2022. Walmart's shares fell about 1%.
The reported offer price is nearly 30% higher than Vizio's $1.54 billion market cap at close on Monday.
The move comes as Walmart shifts its focus to higher margin businesses including Walmart Connect, its retail media advertising business, which allows brands to sell targeted ads to Walmart shoppers on its website and in-store such as on digital displays, connected TVs and radio.
Since launching in 2021, Walmart has been growing its ad business at a double-digit clip on average, generating sales of about $3 billion last year, according to a report from Insider Intelligence.
Ownership of Vizio would give Walmart access to an active user base of nearly 18 million people and would help unlock Vizio's software platform business that generates 60% margins and annual advertising revenue growth of 27%, said Nicholas Zangler, an analyst at Stephens.
By acquiring Vizio, Walmart could also command ownership of about 22% of TVs sold in the U.S. between its private-label own brand and Vizio, he added.
Vizio declined to comment.
The company , founded by William Wang in 2002, considers Walmart its largest customer and has historically been the largest television brand sold at Walmart by sales, the WSJ report said, citing people familiar with the situation.
The news is a negative for Roku (ROKU.O), which also sells smart TVs and streaming devices, and has an exclusive deal with Walmart to sell products fulfilled by Walmart on Roku devices. Roku shares ended down about 9% on Tuesday.
Walmart did not immediately respond to requests for comment. Discussions between Walmart and Vizio are ongoing, and a deal may not eventually happen, the WSJ report said.
