Fox Corp and streaming technology company Roku have entered into a definitive agreement under which Fox will acquire Roku for $160 a share in cash and a Fox Class A common stock transaction that values Roku at about $22 billion in enterprise value, the companies said Monday.
The deal combines Fox’s sports, news and entertainment content and streaming service Tubi with Roku’s connected TV platform, The Roku Channel, first-party data and a direct relationship with more than 100 million global streaming households, the deal’s partners touted.
Lachlan K. Murdoch, Fox’s executive chairman and CEO, on a morning analyst call, called the acquisition a “defining moment” for his company, and one that “pairs Fox, the leader in live news and sports, with Roku, the leading connected TV platform. This acquisition will strengthen and expand our position in the high-growth digital video ecosystem and open new ways to serve our audiences and partners.”
Murdoch added that the Roku acquisition, which followed the acquisition of Tubi in 2020, continued a “metrics-focused” strategy that avoids getting caught in an arms race around the streaming industry. He added: “Our achievements give us great confidence in our ability to drive growth within the expanded Fox company.”
Murdoch argued that Roku has helped Fox navigate the rapidly evolving streaming sector, to include ongoing distribution of Fox and Tubi content: “We’re seeing a clear consumer preference for bundling. Consumers are gravitating toward simpler, more unified experiences on their favorite platforms like Roku.”
On a preliminary basis, the combined company will become the third-largest player in U.S. television by viewership share, “with an attractive mix of Fox sports, news and entertainment content, along with streaming services Tubi and The Roku Channel,” the companies said. “This distribution and syndication reach extends to every major viewing environment – broadcast, cable, local and streaming – creating a broad and diverse reach that benefits viewers, partners and advertisers.”
Anthony Wood, founder, chairman and CEO of Roku, also said on the analyst call that his company is entering the deal from a position of strength. “Simply put, it is the best way to accelerate our long-term strategy and continue shaping the future of television,” he said.
Roku reaches more than 100 million households worldwide. “Together, we believe Roku and Fox will be uniquely positioned to deliver the value, customization and simplicity viewers want,” Wood added.
The deal comes after a strategic review by Roku, which settled on Fox as the preferred bidder. “Fox’s offer was the right one for our shareholders and we went through a very thorough process and are very pleased with the outcome,” Wood told analysts of the formal sale.
In their comments on the deal, the companies highlighted several strategic benefits. The first is increased scale and reach, which the companies noted that together, they will “include premium live content, broad distribution, and access to large audiences across line and streaming,” Fox said in a previous statement.
Murdoch said Roku will remain an open platform as a connected TV service to rival streaming providers like Netflix and Prime Video after the deal closes. “It is essential that Roku remains an open and partner-friendly company,” he added. Wood also said: “We know how to promote our own services, as well as our partners’ services, so we intend to continue to do so.”
Fox will take on $8 billion in new debt to finance the deal, which upon closing is expected to give Fox shareholders ownership of 73 percent of the combined companies. Roku shareholders will retain the remaining 27 percent stake. The Roku acquisition is expected to close in the first half of 2027.
The Roku deal falls in line with Murdoch’s recent talk of potential acquisitions due to the company’s healthy balance sheet. On Friday, LightShed Partners analyst Rich Greenfield cited Fox as a potential acquirer of Roku.
“Given how closely tied Fox is to the legacy TV ecosystem, acquiring Roku will enable Fox to meaningfully reposition its narrative with investors toward the streaming future that began with its acquisition of Tubi,” he explained, adding, “It’s worth noting that Fox sold its 6 million shares of Roku at $58 in 2020 to help fund the Tubi acquisition. In contrast, it would certainly be ironic if Fox bought Roku now.”
