Fox Corp is acquiring Roku in a cash-and-stock transaction valued at approximately $22 billion, betting that combining its sports and news programming with a leading TV streaming platform will fortify its position as audiences migrate online.
Deal Details
The agreement, announced on Monday, grants Fox access to more than 100 million households using Roku's streaming platform. This move could help the cable TV-reliant media company enhance ad targeting and reduce dependence on traditional distribution channels.
This is Fox's first major acquisition since CEO and Chairman Lachlan Murdoch solidified control over the media empire built by his father Rupert, following a family settlement last year.
Lachlan Murdoch described the Roku deal as a "defining moment" for Fox, bringing together "the most valuable live content portfolio in video consumption with the preeminent streaming platform through which America watches it."
Fox shares fell 8% in premarket trading, while Roku rose 2.6% to $147.5, trading below the offer price of $160 per share.
Roku's Business
As one of the first companies to bring streaming platforms like Netflix and YouTube to televisions via connected devices and smart TVs, Roku's business is primarily driven by advertising and subscription revenue from streaming apps on its platform. It also operates the free-to-watch Roku Channel.
Advertising is Roku's largest revenue component, generating $613 million in the first quarter, up 27% year-over-year.
Transaction Terms
Under the agreement, Roku investors will receive $96 in cash and approximately 0.97 Fox Class A shares for each share held, valuing the offer at $160 per share.
While Fox dominates cable TV with its sports lineup and top-rated Fox News, its streaming presence has been limited to the free-to-watch service Tubi, as cord-cutting accelerates the shift from traditional television.
Buying Roku gives Fox more heft in ad-supported streaming, with the combined company set to become the third-largest player in US television by viewership, according to the companies.
"This gives Fox greater control over discovery, data, and monetization at a time when TV viewing continues to shift away from traditional channels," said PP Foresight analyst Paolo Pescatore.
Fox shareholders will own roughly 73% of the combined company after closing, with Roku investors holding the rest.
The boards of both companies have unanimously approved the transaction, which is expected to close in the first half of calendar year 2027 and generate about $400 million in annual cost savings.
Fox plans to fund the cash portion through new debt and cash on hand, backed by $12 billion in committed bridge financing from Morgan Stanley.
