Fox has reached an agreement to acquire Roku, a leading streaming service, in a deal valued at around $22 billion, including debt. This acquisition will provide Fox access to over 100 million households globally, along with the Roku channel and its valuable first-party data. Roku, known for its history in bringing streaming platforms like Netflix and YouTube to TVs through connected devices, has a strong presence in the advertising and subscription revenue streams.
Anthony Wood, the founder of Roku, previously worked at Netflix during the early 2000s when the company transitioned from DVD rentals to video streaming. Under Wood’s leadership as chairman and CEO, Roku has grown significantly, with revenue from advertising reaching $613 million in the first quarter of this year, a 27% increase from the previous year.
The merger between Fox and Roku is expected to position the combined entity as the third-largest player in the U.S. television market by share of viewing. Lachlan Murdoch, CEO of Fox, highlighted the strategic benefits of combining Fox’s content with Roku’s large streaming platform, which will enhance advertising and subscription opportunities for Fox.
Analysts view the acquisition as a move that will strengthen Fox’s presence in the ad-supported streaming space, allowing for greater control over content discovery, data, and monetization. The deal terms include offering Roku investors $96 in cash and approximately 0.97 Fox Class A shares per share held, valuing each share at $160.
Upon completion of the deal, existing Fox shareholders are expected to own around 73% of the combined company, with Roku shareholders owning approximately 27%. The transaction is subject to approval from both Fox and Roku shareholders, as well as regulatory clearance, and is anticipated to close in the first half of the upcoming year. Stock market reactions showed a decline in Fox’s stock and a slight increase in Roku’s shares following the announcement of the deal.