Fox has reached an agreement to acquire Roku, a pioneering streaming company, in a deal worth around $22 billion US, inclusive of debt and a mix of cash and stock. This acquisition will provide Fox with access to over 100 million households worldwide, the Roku channel, and its valuable first-party data. Fox, known for its extensive sports, news, and entertainment networks, including Tubi acquired in 2020, will now expand its reach through this deal.
Roku’s founder, Anthony Wood, previously part of Netflix during the early 2000s transition from DVD rentals to video streaming, later founded Roku after it spun off from Netflix. Wood, currently serving as Roku’s chairman and CEO, was inspired to create Roku by his passion for recording and watching the TV series “Star Trek.”
As a trailblazer in bringing streaming services like Netflix and YouTube to TVs via connected devices and smart TVs, Roku generates revenue primarily from advertising and subscription fees from streaming apps on its platform. Notably, the company operates the ad-supported Roku Channel.
Advertising forms a significant part of Roku’s revenue, totaling $613 million in the first quarter, marking a 27% year-on-year increase. Both companies have confirmed that Roku will remain an open and partner-friendly platform post-acquisition. Together, the merged entity is set to become the third-largest player in U.S. television viewership share.
Fox’s CEO, Lachlan Murdoch, emphasized that integrating the businesses will combine Fox’s live news and sports content with Roku’s extensive streaming platform, enhancing exposure to advertising and streaming subscriptions. Anthony Wood expressed enthusiasm for the collaboration, highlighting the opportunity to accelerate innovation for viewers, partners, and advertisers.
Upon completion of the transaction, Wood will continue to play a role within the company and join the Fox board of directors. Analyst Paolo Pescatore from PP Foresight views the acquisition as empowering Fox in the ad-supported streaming market, enabling enhanced control over discovery, data, and monetization as TV viewing trends away from traditional channels.
Under the terms of the deal, Roku investors will receive $96 US in cash and approximately 0.97 Fox Class A shares per share held, equating to $160 US per share. The transaction is anticipated to close in the first half of the following year pending approval from both Fox and Roku shareholders, as well as regulatory authorities.
Following the announcement, Fox’s stock experienced a decline pre-market, while Roku’s shares saw a slight increase.
