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Walmart’s Vizio Acquisition Faces FTC Antitrust Review

 |  April 30, 2024

Walmart’s proposed acquisition of smart-TV manufacturer Vizio Holding Corp. is now set to undergo rigorous scrutiny by the Federal Trade Commission (FTC), as confirmed by Vizio on Tuesday.

According to disclosures made in a regulatory filing, both Walmart and Vizio received a “second request” from the antitrust agency on Monday, signaling the necessity for additional information regarding the proposed deal. The initiation of an in-depth review process was widely expected, potentially spanning months or even years, depending on the complexity of the transaction, as reported by Bloomberg.

Walmart’s initial announcement in February outlined its agreement to purchase Vizio for approximately $2.3 billion. The retail giant has expressed its intention to finalize the acquisition within the current fiscal year, slated to conclude in January.

The strategic acquisition is poised to bolster Walmart’s advertising arm, known as Walmart Connect. With an emphasis on enhancing capabilities both online and in physical stores, the integration of Vizio’s technology is anticipated to amplify Walmart’s ability to target and engage with consumers. Bloomberg noted that this acquisition aligns with Walmart’s broader objective of diversifying its revenue streams, particularly through ventures with higher growth potential and more favorable profit margins than its traditional retail operations.

Read more: Walmart Facing Antitrust Panel in Mexico Over Monopoly Claims

The Bentonville, Arkansas-based corporation has been proactive in expanding into nonretail sectors deemed as growth drivers, with the advertising business prominently featured among them. Walmart’s management has underscored the importance of its advertising arm in fueling profitability growth, positioning it as a key component of its long-term strategy.

However, amidst Walmart’s plans, the regulatory landscape remains uncertain. The Biden administration has demonstrated a heightened scrutiny of corporate mergers and acquisitions, with the FTC taking a notably aggressive stance. Recent legal actions by the FTC challenging proposed mergers, such as those involving supermarket giants Kroger Co. and Albertsons Cos., as well as handbag rivals Tapestry Inc. and Capri Holdings Ltd., underscore the regulatory hurdles that Walmart’s acquisition of Vizio may encounter.

Source: Bloomberg