Walmart Inc.’s planned acquisition of Vizio Holding Corp., a smart-TV maker, is set to undergo a thorough antitrust review by the Federal Trade Commission (FTC), according to an announcement by Vizio on Tuesday.
Second Request from FTC
Vizio revealed in a regulatory filing that both companies received a “second request” from the FTC, asking for additional information regarding the proposed acquisition. Such requests are standard procedure in antitrust reviews and often prolong the regulatory process significantly.
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Deal Details
In February, Walmart announced its intention to purchase Vizio for approximately $2.3 billion. The retail giant aims to finalize the deal within the current fiscal year, ending in January.
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Business Expansion
The acquisition is poised to bolster Walmart’s burgeoning advertising arm, Walmart Connect, which has been expanding its online and in-store capabilities. By integrating Vizio’s technology, Walmart hopes to enhance its advertising reach and engagement with consumers.
Strategic Move
Walmart, headquartered in Bentonville, Arkansas, has been diversifying its revenue streams beyond traditional retail. The advertising sector, characterized by rapid growth and higher margins, is seen as a key driver of profitability for the company.
Regulatory Landscape
Under the Biden administration, there has been a heightened scrutiny of mergers and acquisitions. The FTC has been actively challenging proposed deals, recently filing lawsuits to block mergers in various industries.
Market Reaction
Following the news, shares of Vizio, based in Irvine, California, experienced a 2.8% decline in premarket trading. Walmart’s stock saw a marginal 0.1% decrease during the same period.
By undergoing a comprehensive antitrust review, Walmart and Vizio are navigating the regulatory landscape as they seek to solidify their strategic partnership and capitalize on new growth opportunities in the competitive market.