Fox Corporation has announced an agreement to acquire streaming pioneer Roku through a combination of cash and stock valued at approximately $22 billion, including debt. This acquisition will provide Fox access to over 100 million global households, integrating the Roku channel along with its first-party data. Fox manages a vast network in sports, news, and entertainment, along with Tubi, which it acquired in 2020.
Roku’s founder, Anthony Wood, previously worked at Netflix in the early 2000s when Netflix shifted from DVD rentals to streaming. Roku emerged from Netflix and launched its first set-top box in 2008. Wood, who serves as Roku’s chairman and CEO, was driven by his desire to record and play “Star Trek,” his favorite show.
According to statements from Fox and Roku, Roku will continue operating as an open, partner-friendly platform. The combined entity is poised to become the third-largest player in U.S. television based on viewing share. Fox Corp. CEO Lachlan Murdoch highlighted that the merger will unify Fox’s live news and sports content with a highly viewed streaming platform, boosting Fox’s exposure to advertising and streaming subscriptions.
“The combination with FOX is an extraordinary opportunity to accelerate our vision, scale faster and innovate more aggressively for viewers, partners and advertisers,” Wood remarked.
Wood will remain actively involved in the company and will join Fox’s board of directors post-transaction. Fox will offer $96 in cash and 0.9693 shares of its Class A common stock for each Roku Class A and Class B share outstanding, valuing the transaction at $160 per Roku share. Upon deal closure, existing Fox shareholders are expected to possess about 73% of the combined company, while Roku shareholders will own approximately 27%.
The transaction is projected to conclude in the first half of next year, pending approval from both Fox and Roku shareholders and regulatory bodies. Prior to market opening, Fox’s stock experienced a decline, while Roku shares saw a slight increase.