Walmart agrees to buy smart TV maker Vizio for $2.3B — sending Roku stock plunging
Walmart has agreed to pay $2.3 billion to acquire smart television maker Vizio — a move to bolster the retailer’s burgeoning advertising business as it takes on rival Amazon.
The deal, however, is seen as bad news for Roku, according to analysts. Roku, which also sells smart TVs and streaming devices, has an exclusive deal with Walmart to sell products fulfilled by Walmart on Roku devices.
Shares of Roku were down by nearly 7% at the start of Tuesday’s trading session on Wall Street.
The nation’s largest retailer will acquire Vizio in an all-cash deal valued at $11.50 per share.
Vizio’s stock was trading at around $10.98 a share in pre-market activity on Tuesday — more than 15% higher than its $9.53 closing price from Friday.
The deal is a blow for Vizio’s rival, Roku, which saw its stock price plummet by 24% in pre-market trading. Christopher Sadowski
Companies that advertise with Walmart will now be able to reach more potential customers thanks to the acquisition.
“By bringing our capabilities and resources together, we’ll drive innovation and create even more value for our customers,” Vizio CEO William Wang said.
Wang predicted that Vizio’s “technology will help bring a scaled, connected TV advertising platform to Walmart Connect.”
“This transaction delivers immediate and compelling value to Vizio stockholders and is a true testament to the hard work of the entire Vizio team.