Fox Roku Deal Would Reshape Streaming With $22 Billion Acquisition
Fox Corp. has agreed to buy streaming pioneer Roku in a cash-and-stock deal valued at approximately $22 billion, including debt, in a move that would significantly expand Fox’s position in the streaming television market.
The companies announced Monday that Roku will continue operating as an open and partner-friendly platform, with no immediate changes expected for customers. Fox and Roku said the combined company would become the third-largest player in U.S. television by share of viewing.
The deal follows media reports that Roku had been exploring strategic options, including a possible sale. Before Fox emerged as the buyer, companies such as Netflix, Amazon, Comcast and Disney were reportedly discussed as potential suitors.
What Fox Gains From Roku
The acquisition would give Fox access to more than 100 million global households, along with the Roku Channel and Roku’s first-party data.
Fox already oversees a large portfolio of sports, news and entertainment programming, along with Tubi, the free ad-supported streaming service it acquired in 2020. By adding Roku, Fox would gain a broader streaming distribution platform and a stronger position in digital advertising and subscription-based services.
Fox Corp. CEO Lachlan Murdoch said in a statement that bringing the companies together would combine Fox’s live news and sports content with Roku’s large streaming audience.
Murdoch also said during a conference call that the combined company would be better positioned for the next decade of video than either company would have been on its own.
“We are confident this is the right transaction, at the right moment, for all the right reasons,” Murdoch said.
Roku’s Streaming Roots
Roku founder Anthony Wood helped shape the early streaming era after working with Netflix in the early 2000s as the company began moving from DVD rentals into streaming.
Roku was later spun off by Netflix and released its first set-top box in 2008. Wood, who serves as Roku’s chairman and CEO, has said his original motivation for pursuing the technology was wanting to record and play his favorite show, “Star Trek.”
“The combination with FOX is an extraordinary opportunity to accelerate our vision, scale faster and innovate more aggressively for viewers, partners and advertisers,” Wood said in prepared remarks.
Wood is expected to keep an ongoing role at the company and will join Fox’s board of directors after the deal closes.
Deal Still Needs Approval
Under the terms of the agreement, Fox will pay $96 in cash and 0.9693 shares of Fox Class A common stock for each Roku Class A and Class B share outstanding. The transaction values Roku at $160 per share.
Existing Fox shareholders are expected to own about 73% of the combined company, while Roku shareholders would own about 27% once the deal closes.
The transaction is expected to close in the first half of next year. It still requires approval from Fox and Roku shareholders, as well as regulatory approval.
Fox shares declined before the market opened Monday, while Roku shares rose slightly.
