In a significant move to enhance its streaming capabilities, Fox Corp has announced a $22 billion deal to acquire Roku, a leading connected TV service, at a purchase price of $160 per share. The transaction will be executed through a combination of cash and Fox Class A stock, resulting in an enterprise valuation for Roku at $22 billion. Upon completion of the deal, Fox shareholders are anticipated to hold approximately 73% of the newly merged business, while Roku shareholders will retain the remaining 27%.
Founded in 2002, Roku has established itself as a dominant player in the streaming market, reaching around 100 million global households and being present in more than half of all broadband households in the U.S. Fox’s portfolio includes its flagship broadcast network, a wide array of local stations, cable networks such as Fox News and Fox Business, the subscription streaming service Fox One, as well as an extensive sports rights portfolio encompassing the NFL, MLB, NASCAR, Big Ten, and the FIFA World Cup.
This acquisition marks a considerable advancement in Fox’s streaming strategy, six years following its $440 million acquisition of Tubi, a free and ad-supported streaming service. Interestingly, Fox funded part of the Tubi deal by divesting shares it previously acquired in Roku, highlighting the intertwined histories of both companies.
In their announcement, Fox emphasized that the acquisition is poised to create a “scaled next-generation media and technology company” that harnesses the enduring popularity of live sports and news amid the increasing dominance of streaming platforms. The combined entity, incorporating Fox’s existing sports, news, and broadcast networks, along with Tubi and The Roku Channel, is projected to emerge as the third-largest TV player in the U.S. by viewing share. The complementary nature of Tubi—where approximately 90% of its viewing is ad-supported (AVOD)—and Roku, which focuses more on FAST channels, is seen as an advantageous pairing.
Both Fox and Roku have expressed commitment to maintaining Roku’s status as an open, partner-friendly platform while ensuring the continued widespread distribution of Fox content. The boards of both companies have unanimously approved the deal, which is anticipated to positively impact free cash flow per share by the second full year post-closing. Additionally, the merger is expected to yield around $400 million in annual cost synergies.
Fox CEO Lachlan Murdoch articulated the significance of this acquisition as a pivotal moment for the company and a logical progression of its strategy over the past decade. He recalled how the company realigned its focus toward live news and sports in 2019 and strengthened its holdings with the acquisition of Tubi in 2020. Murdoch stated, “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.”
Roku founder, chairman, and CEO Anthony Wood will play a continuing role in the new entity and join the Fox board. Addressing the merger, Wood expressed pride in Roku’s achievements and acknowledged the opportunity that this collaboration presents for innovation and growth in the streaming landscape. He highlighted that the transaction offers a substantial premium for Roku shareholders while also enabling them to benefit from the future potential of the combined organization.
The execution of this deal is contingent on customary closing conditions, alongside approvals from shareholders and regulatory entities in the U.S. and internationally. The acquisition is expected to conclude in the first half of 2027, marking a transformative moment for both companies in the evolving media landscape.
