Fox Corp. has agreed to acquire Roku in a cash-and-stock deal valued at approximately $22 billion, including debt. The acquisition, announced on Monday, will give Fox access to Roku's more than 100 million global streaming households, along with its advertising platform and first-party data. Fox will pay $96 in cash and 0.9693 shares of its Class A common stock for each Roku Class A and Class B share outstanding, valuing the transaction at $160 per Roku share. Existing Fox shareholders are expected to own about 73% of the combined company, while Roku shareholders will hold 27%. The deal is expected to close in the first half of 2027, pending regulatory and shareholder approvals.
Core Facts & Immediate Impact
Fox's acquisition of Roku marks its first major deal since CEO Lachlan Murdoch took control, following a family settlement last year. The combined entity will become the third-largest player in U.S. television by share of viewing, according to the companies. Fox's stock fell 8% in premarket trading, while Roku's shares rose nearly 3% before trading was halted.
Strategic Rationale & Industry Context
Fox aims to pair its sports and news programming with Roku's streaming platform, reducing reliance on traditional cable TV distribution. Roku's business is driven by advertising and subscription revenue, with advertising accounting for $613 million in the first quarter of 2024, up 27% year-on-year. Fox already operates Tubi, a free ad-supported streaming service, and Roku runs The Roku Channel. Analysts suggest the merger could create a dominant streaming leader with a significant share of total TV viewing.
Leadership & Future Operations
Roku founder Anthony Wood, who previously worked at Netflix, will join Fox's board of directors post-deal. Both companies have stated that Roku will continue to operate as an open, partner-friendly platform. Fox CEO Lachlan Murdoch described the acquisition as a "defining moment" for the company, aligning with its strategy of focusing on live news and sports content.
Regulatory and Market Reactions
The deal follows reports that Roku was exploring strategic options, including a full sale, amid interest from companies seeking access to its streaming audience and advertising platform. Fox has secured a $12 billion loan to fund the cash portion of the transaction. The acquisition is subject to approval from Fox and Roku shareholders, as well as regulatory clearance.