Fox Corp. has agreed to acquire streaming platform pioneer Roku in a cash-and-stock deal valued at approximately $22 billion, including debt, marking one of the largest media transactions of the year and reshaping the competitive landscape of the streaming industry.
The deal will give Fox access to more than 100 million global households, along with the Roku Channel and its first-party data. Fox oversees a massive sports, news, and entertainment network, as well as Tubi, the free streaming service it acquired in 2020, according to NBC Los Angeles.
“The combination with FOX is an extraordinary opportunity to accelerate our vision, scale faster and innovate more aggressively for viewers, partners and advertisers,” said Roku founder and CEO Anthony Wood in prepared remarks. Wood will have an ongoing role at the combined company and will join the Fox board of directors after the transaction closes.
Roku’s history is deeply intertwined with the streaming revolution. Wood initially worked within Netflix in the early 2000s as the company attempted to shift from DVD rentals to streaming. Roku was spun off from Netflix and released its first set-top box in 2008. Wood has said his motivation in pursuing the technology was his desire to record and play his favorite show, Star Trek, as NBC Los Angeles reported.
Fox CEO Lachlan Murdoch said the combined company will become the third-largest player in U.S. television by share of viewing. “We are confident this is the right transaction, at the right moment, for all the right reasons,” Murdoch said during a conference call.
The companies said Roku will continue to be run as an open, partner-friendly platform, meaning consumers are unlikely to see immediate changes. Fox and Roku said the combined company will bring together Fox’s live news and sports content with a streaming platform that has large viewership, giving Fox more exposure to advertising and streaming subscriptions.
Fox will pay $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. Existing Fox shareholders are expected to own approximately 73% of the combined company, with Roku shareholders owning about 27%. The deal, which requires shareholder and regulatory approval, is expected to close in the first half of next year.
The acquisition follows a wave of media consolidation, including Comcast’s announcement that it plans to split into two companies by spinning off NBCUniversal and Sky, and the DOJ’s approval of Paramount Skydance’s $110 billion acquisition of Warner Bros. Discovery.
