Vizio to be acquired by Walmart for $2.3 billion in expansion of ad business.

• Walmart is buying TV maker Vizio for $2.3 billion in cash.
• The aim of the move is to increase the profitability of the big-box retailer's advertising business.
• Walmart has long been a major seller of Vizio’s TVs.

The largest U.S. retailer has agreed to buy TV maker, expanding its high-profit ad business, as announced Tuesday.

Vizio will be acquired by Walmart for $2.3 billion, or $11.50 per share, in cash, as the big-box retailer announced the acquisition along with its fourth-quarter earnings.

On Tuesday, Vizio shares, which had increased by 16% after reports of a deal first surfaced last week, closed at $11.08.

Vizio devices have been a popular choice among Walmart and its Sam's Club warehouse chain customers for years. Now, Walmart is excited to acquire the company in order to enhance its advertising business through the use of Vizio's SmartCast Operating System, which enables users to access free ad-supported content on their TVs.

In an effort to increase profits, Walmart has attempted to expand its media business, Walmart Connect, which generates higher profit margins than selling groceries or clothing. The segment's advertising sales increased by 22% in the fourth quarter.

Seth Dallaire, executive vice president and chief revenue officer of Walmart U.S., stated that VIZIO's customer-centric operating system offers excellent viewing experiences at competitive prices, while also allowing for a profitable advertising business that is rapidly expanding.

As Amazon's ad segment continues to expand, Walmart is responding with a competitive move.

Vizio's SmartCast system has 18 million active accounts, giving companies that advertise with Walmart a greater reach through the retailer's control of the platform.