Fox Corp. Acquires Roku in Major Streaming Deal Worth $22 Billion
Fox Corp. and Roku Join Forces
Fox Corporation has announced its acquisition of Roku in a significant cash-and-stock transaction valued at around $22 billion, which includes debt. Both companies confirmed on Monday that Roku will maintain its status as an open and partner-friendly platform, indicating that customers should not expect immediate changes. This merger positions the combined entity as the third-largest player in U.S. television by viewing share.
Reports emerged last Friday suggesting that Roku was exploring various strategic options, including a potential sale. Speculation regarding interested buyers included major names such as Netflix, Amazon, Comcast, and Disney. This acquisition will provide Fox with access to over 100 million households worldwide, along with the Roku channel and valuable first-party data. Fox already manages a vast network of sports, news, and entertainment, including Tubi, which it acquired in 2020.
Roku's founder, Anthony Wood, previously worked at Netflix in the early 2000s during its transition from DVD rentals to streaming. Roku was eventually spun off from Netflix and launched its first set-top box in 2008. Wood, who serves as Roku’s chairman and CEO, expressed that his initial motivation for developing the technology stemmed from a desire to record and watch his favorite show, 'Star Trek.'
Lachlan Murdoch, CEO of Fox Corp., stated that merging the two businesses will integrate Fox’s live news and sports content with a widely viewed streaming platform. This will enhance Fox's advertising reach and subscription services. Wood remarked that this partnership represents a remarkable opportunity to expedite their vision, scale operations, and innovate for viewers, partners, and advertisers alike.
Following the completion of the transaction, Wood will continue to play a significant role at Roku and will join the Fox board of directors. Murdoch emphasized during a conference call that the newly formed company will be better equipped for the evolving video landscape over the next decade than either company could achieve independently. He expressed confidence that this transaction is timely and strategically sound.
Fox will compensate $96 in cash and 0.9693 shares of its Class A common stock for each outstanding Roku Class A and Class B share, valuing the transaction at $160 per Roku share. Upon completion, existing Fox shareholders are projected to hold approximately 73% of the combined entity, while Roku shareholders will own about 27%. The deal is anticipated to finalize in the first half of next year, pending approval from shareholders and regulatory bodies. Following the announcement, Fox's stock saw a decline, while Roku's shares experienced a slight increase.