Fox Corp. is acquiring Roku in a deal worth about $22 billion consisting of cash and stock, the companies announced.
The acquisition will give Fox direct access to Roku’s more than 100 million homes, as well as expanded ad targeting data and a way to reduce its reliance on traditional cable distribution. The deal is expected to be completed in the first half of 2027.
The transaction is Fox CEO and Chairman Lachlan Murdoch’s first major acquisition since he consolidated control of the media company following a family deal last year.
Deal terms: how the acquisition is structured
Roku shareholders will receive $96 cash and approximately 0.97 Fox Class A shares for each Roku share held, valuing the offer at $160 per share.
This represents a 33.7% premium over Roku’s closing price on Thursday, a day after reports emerged that the company was exploring a sale.
The transaction includes approximately $14.6 billion in cash, with the rest paid in stock. It also includes approximately $8.3 billion of new debt added to Fox’s balance sheet. The deal is expected to generate annual cost savings of approximately $400 million.
Following the merger, Fox shareholders will own approximately 73% of the combined company, with the remainder held by Roku investors.
Roku founder and CEO Anthony Wood will continue to play a role in the new company and will join Fox’s board. Based on his 55% voting stake, Wood could potentially make up to $3 billion from the sale.
How investors and analysts are reacting
Fox shares fell about 17 percent in early trading, possibly due to concerns that the deal would dilute the stock. Roku shares traded up to 12 percent below the $160 offering price.
TD Cowen analyst Doug Creutz said, “We remain skeptical that this deal will generate value for Fox shareholders. The history of content and platform mergers in media has generally been unfavorable.”
He pointed to AT&T’s failed 2018 acquisition of Time Warner, which was canceled three years later, as a cautionary example.
Meanwhile, JPMorgan analyst Corey Carpenter was more positive about the deal, saying it could shift Roku’s focus toward digital and address long-term concerns about its presence in PayTV.
What this means for users and why Fox is buying it
Roku and Fox have confirmed that their existing distribution partnerships will remain in place. Murdoch downplayed the potential conflict of interest, emphasizing that “right now we are partners with YouTube, YouTube TV and Comcast, and that doesn’t change.”
For Roku users, the acquisition is unlikely to cause immediate changes to the device’s functionality or the available app ecosystem.
Roku continues to offer streaming apps from competitors like Paramount, NBCUniversal and Netflix, and Fox has assured that these partnerships will continue.
The free Roku Channel will remain separate from Fox’s ad-supported streaming platform Tubi, indicating that both services will continue to operate under their existing brands.
As cord-cutting continues to grow, Fox is working to diversify away from traditional cable distribution. Last year, the company launched Fox One, a subscription service, as part of that effort.
Roku earns revenue primarily through advertising and commissions on subscription sales through platforms such as Netflix and Peacock, serving more than 20 million customers with billing relationships.
If the deal goes through, the combined company would rank as the third-largest TV viewership according to Nielsen’s metrics, behind YouTube and Disney and ahead of Netflix.
Fox reports strong demand for its live sports events, including NFL games, Major League Baseball and the FIFA World Cup. The main strategic rationale behind the acquisition is to combine that content with the reach of Roku’s audience.
Fox is already familiar with Roku. In 2020, Fox financed its $440 million purchase of Tubi by selling a 5% stake in Roku, a holding it has held since 2013.
Approvals and timeline for the Fox-Roku merger
The boards of both companies have unanimously approved the transaction. The deal is expected to close in the first half of 2027, pending regulatory approvals and standard closing conditions.
Allen & Company is serving as lead financial advisor to Fox, while Catalyst Partners is advising Roku as its exclusive financial advisor.
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