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Vizio televisions are displayed at a store on February 13, 2024 in San Rafael, California. 

Justin Sullivan | Getty Images

Walmart has agreed to buy TV maker Vizio, the companies announced Tuesday, as the largest U.S. retailer grows its high-profit ad business.

Walmart will acquire Vizio for $2.3 billion, or $11.50 per share, in cash. Vizio shares, which spiked after reports of the deal first emerged last week, closed at $9.53 on Friday.

The big-box retailer announced the acquisition as it reported fourth-quarter earnings.

Walmart and its Sam’s Club warehouse chain have long been major sellers of Vizio devices. But in buying the company, Walmart touted the potential to boost its ad business through Vizio’s SmartCast Operating System, which allows users to stream free ad-supported content on their TVs.

As it pushes for higher profits, the retail titan has tried to expand its media business Walmart Connect, which comes with bigger profit margins than selling groceries or clothing. The segment’s advertising sales grew 22% in the fourth quarter.

“We believe VIZIO’s customer-centric operating system provides great viewing experiences at attractive price points. We also believe it enables a profitable advertising business that is rapidly scaling,” said Seth Dallaire, executive vice president and chief revenue officer of Walmart U.S., in a statement.

This story is developing. Please check back for updates.

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