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Fox Corporation announced a definitive agreement to acquire Roku for about $22 billion, combining Fox's news and sports networks with Roku's streaming platform. The deal, priced at $160 per share in cash and stock, aims to bolster Fox's streaming strategy and achieve cost synergies.
Fox Corporation has announced a definitive agreement to acquire Roku, the streaming device maker, for approximately $22 billion. The deal, valued at $160 per share in a combined cash and stock transaction, represents a major consolidation move in the media and streaming industry.
Fox plans to finance the cash component using existing cash reserves and new debt financing, including a secured $12 billion loan. Following the announcement, Fox stock dropped about 15% in morning trading, reflecting market skepticism about the hefty price tag and integration risks. The acquisition brings together Fox's portfolio of news and sports networks with Roku's streaming platform and device business. Fox's assets include its broadcast network, Fox News Channel, and Tubi, its free ad-supported streaming service.
Roku contributes its popular streaming devices and The Roku Channel, which operates similarly to Tubi as a free ad-supported platform. This synergy is expected to create a powerful player in the connected TV advertising space, which has become increasingly competitive with the rise of streaming services from traditional media companies and tech giants. The deal marks Fox's first major acquisition since 2019, when it sold its entertainment assets to Disney for $71 billion.
Since then, Fox has focused on live news and sports programming, emphasizing advertising revenue growth. CEO Lachlan Murdoch described the deal as a defining moment for the company during an investor call, noting that Fox was an early investor in Roku and a longtime commercial partner. Fox initially entered the streaming market in 2020 by acquiring Tubi for $440 million, which served as its primary streaming strategy before the launch of Fox One, a direct-to-consumer service that debuted last year.
The Roku acquisition is expected to accelerate Fox's streaming ambitions by providing a large installed base of devices and a direct relationship with millions of users. Roku's platform, which includes advertising technology and a content marketplace, will complement Fox's existing assets and allow for deeper integration of Fox's content into Roku's ecosystem. Financially, Fox anticipates approximately $400 million in run-rate cost synergies from the merger, along with additional revenue opportunities from cross-selling and increased advertising inventory.
Under the terms, existing Fox shareholders will retain about 73% ownership of the combined company, while Roku shareholders will hold approximately 27%. The deal is subject to regulatory approvals and is expected to close in the coming months. Industry analysts have mixed views, with some praising the strategic logic of combining content and distribution, while others question the valuation given Roku's slowing growth and increased competition from smart TV operating systems.
However, Murdoch emphasized that the transaction positions Fox to capitalize on the shift to ad-supported streaming and live sports, which continue to attract the largest audiences. The acquisition also comes as the broader media landscape sees consolidation, with companies like Warner Bros. Discovery and Paramount Global exploring mergers to achieve scale. Fox's move to acquire Roku could spur further dealmaking as media firms seek to strengthen their positions in the streaming wars
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