Key Points
- Fox Corporation has agreed to acquire Roku in a cash-and-stock deal valued at approximately $22 billion.
- The deal combines Fox’s live sports, news and entertainment assets with Roku’s connected TV platform, which reaches more than 100 million streaming households globally.
- Fox said the combined entity would become the third-largest television platform in the United States across broadcast, cable and streaming.
Fox Corporation has reached an agreement to acquire Roku in a cash-and-stock transaction valued at approximately $22 billion, marking one of the largest media deals in recent years and significantly expanding the company’s presence in streaming and connected television.
The transaction, first hinted at last week when media reports indicated Roku had held discussions with an unnamed media company about selling itself, values Roku at $160 per share, with shareholders receiving $96 in cash and 0.9693 shares of Fox Class A common stock for each Roku share. Upon closing, existing Fox shareholders are expected to own approximately 73 percent of the combined company, while Roku shareholders will hold the remaining 27 percent.
The deal combines Fox’s portfolio of sports, news and entertainment assets — including Fox News, Fox Sports, Tubi and the Fox broadcast network — with Roku’s connected TV platform, The Roku Channel and direct relationships with more than 100 million streaming households worldwide.
Fox said the combined company would become the third-largest television platform in the United States by share of viewing, spanning broadcast, cable and streaming distribution.
“This is a defining moment for Fox,” said Lachlan Murdoch, Executive Chair and Chief Executive Officer of Fox Corporation. “Today, we take the next step: bringing together the most valuable live content portfolio in video consumption with the preeminent streaming platform through which America watches it.”
Stock Price
The acquisition is the most significant strategic move by Fox since the company’s remaining assets were separated from 21st Century Fox following Disney’s acquisition of much of the Murdoch media empire in 2019. Since then, Fox has focused on live sports, news and streaming initiatives, including the 2020 acquisition of Tubi and the recent launch of Fox One.
Roku founder and Chief Executive Officer Anthony Wood said the transaction would allow the company to accelerate growth and innovation while providing shareholders with a premium for their shares. Wood will join Fox’s board of directors after the transaction closes.
Roku will continue operating as an open platform for third-party content providers, a key issue given Roku’s relationships with competing streaming services such as Netflix, Amazon Prime Video and others, Fox executives noted.
The companies also plan to continue operating Tubi and The Roku Channel as separate services. During a conference call with investors, Murdoch described the platforms as complementary, noting that audience overlap between the two services is limited.
Fox expects the transaction to generate approximately $400 million in annual cost synergies, with additional revenue opportunities tied to advertising, subscriptions and content distribution. The company will finance the cash portion of the deal through a combination of existing cash and new debt, including $12 billion in committed bridge financing.
The purchase remains subject to shareholder and regulatory approval. Both companies’ boards have already approved the transaction, and Fox said it expects the deal to close next year.
