Fox Corp is acquiring Roku in a cash-and-stock deal valued at approximately $22 billion, betting that combining its sports and news programming with a leading TV streaming platform will strengthen its position as audiences shift online.
Deal Details
The transaction, announced on Monday, gives cable TV-reliant Fox direct access to Roku's large installed base of more than 100 million streaming households. This move helps Fox better sell targeted advertisements and reduce dependence on traditional distribution channels.
Fox will acquire Roku for $160 per share, representing an 11.4% premium over Roku's last closing price. Fox shares fell 8% in premarket trading, while Roku's shares were halted pending the announcement.
Market Position
Roku is one of the first companies to bring streaming platforms like Netflix and YouTube to televisions through connected devices and smart TVs. Its business is primarily driven by advertising and subscription revenue from streaming apps on its platform. Advertising is the largest revenue component, generating $613 million in the first quarter, a 27% increase year-over-year.
Fox already operates Tubi, while Roku runs The Roku Channel. A combination of the two platforms could create a clear leader in streaming, capturing a meaningful share of total TV viewing, according to JP Morgan analysts.
Strategic Rationale
Reuters reported on Friday that Roku was exploring strategic options, including a full sale, amid interest from companies seeking access to its vast streaming audience and advertising platform. The combined company will become the third-largest player in U.S. television by share of viewing, the companies stated.
The deal is expected to close in the first half of calendar year 2027. Upon closing, existing Fox shareholders are expected to own approximately 73% of the combined company, while Roku shareholders will own about 27%.
