According to the Wall Street Journal, Wal Mart, a retail giant, is negotiating to acquire Vizio, an American TV manufacturer. People familiar with the matter said that the deal would exceed $2 billion, which would provide Wal Mart with more channels to sell advertising and sell goods to consumers.
The price of $2 billion is consistent with the amount when LeEco acquired Vizio in 2016. In 2016, Vizio, founded by Chinese entrepreneur Wang Wei, became the best-selling LCD TV brand in the United States and also launched PC and tablet products.
LeEco announced in July of that year that it would acquire Vizio for $2 billion and use it to enter the US market. But in April 2017, LeEco suddenly announced its abandonment of the acquisition, and Vizio sued him, claiming that LeEco wanted to create a false impression of financial health and actively expand its business by acquiring Vizio, and attempted to induce Vizio to provide confidential customer information. In addition, the contract between the two parties had agreed on a termination fee of $100 million, but after the acquisition failed, Vizio only received $40 million. The lawsuit was later settled by the two companies on undisclosed terms in November 2018.
Vizio has stopped producing computers and tablets, with its main products being smart TVs and bar speakers. In 2021, the company landed on the New York Stock Exchange with the stock code VZIO.
After the news was released, Vizio's stock price has risen by 25% in the past five days, from $7.42 per share to the current $9.53 per share, with a total market value of 1.879 billion yuan.
Wal Mart, including its Sam's Club chain, has always been the largest customer of Vizio, and Vizio has always been the TV brand with the largest sales volume of Wal Mart.
Vizio's financial report shows that the company's main business is divided into equipment and platform+, with the latter referring to its smart TV platform SmartCast. As of September 30, 2023, the company's operating revenue was $1.177 billion, a year-on-year decrease of 11.43%; Net profit of 15 million US dollars, a year-on-year turnaround from a net loss of 6.7 million US dollars in the same period last year; The company has cash and cash equivalents of 216 million US dollars. In terms of user data, there were 17.9 million active accounts on the SmartCast platform during the period, with an average income of $31.55 per user, a year-on-year increase of 14%.
In terms of market share, data from the data firm Statista shows that in 2022, Vizio had a 5% market share in the North American smart TV market, ranking sixth, with Samsung, Sony, and LG ranking 1-3.
2022 North American Television Market Share, Source: Statista
In addition, the survey report on the U.S. color TV market released by Kaiyuan Securities at the end of January this year shows that Vizio is a popular brand of small and medium-sized low-priced TVs in Wal Mart, Sam's Club and other retail channels. In the online Amazon channel, Vizio's share has hovered around 5% -10% in the past two years, ranking fourth.
The acquisition is currently uncertain. Although Wal Mart can obtain new advertising channels through Vizio, Wal Mart has a private brand ONN with a similar positioning. If the acquisition is completed, the relationship between Vizio and ONN will also become a problem that Wal Mart needs to solve.