Fox has reached an agreement to purchase the streaming pioneer Roku in a transaction valued at around $22 billion US, including debt and a mix of cash and stock. This acquisition will grant Fox access to over 100 million households globally, the Roku channel, and its valuable first-party data. Fox, known for its extensive sports, news, and entertainment network, acquired Tubi in 2020.
Roku was founded by Anthony Wood, who previously worked at Netflix in the early 2000s during the company’s transition from DVD rentals to video streaming. After being spun off by Netflix, Roku introduced its first set-top box in 2008. Wood, currently serving as Roku’s chairman and CEO, was inspired to develop the technology by his passion for recording and watching his favorite show, “Star Trek.”
As a pioneer in bringing streaming services like Netflix and YouTube to television through connected devices and smart TVs, Roku primarily generates revenue from advertising and subscription fees from streaming apps on its platform. The company also operates the ad-supported Roku Channel.
Advertising accounts for the largest portion of Roku’s revenue, totaling $613 million in the first quarter, marking a 27% increase year-over-year. Fox and Roku announced that following the acquisition, Roku will remain an open and partner-friendly platform. The combined entity is projected to become the third-largest player in U.S. television viewership share.
Fox’s CEO, Lachlan Murdoch, emphasized that merging the businesses will combine Fox’s live news and sports content with a streaming platform boasting a large audience. This partnership will enhance Fox’s exposure to advertising and streaming subscriptions. Wood expressed enthusiasm about the collaboration, stating that it presents an exceptional opportunity to accelerate innovation and scale for viewers, partners, and advertisers.
Following the transaction’s completion, Wood will continue to play a role at the company and will join the Fox board of directors. Analyst Paolo Pescatore from PP Foresight highlighted that Fox’s acquisition of Roku strengthens its position in the ad-supported streaming sector, providing greater control over content discovery, data, and monetization in an evolving TV landscape.
Under the terms of the deal, Roku shareholders will receive $96 US in cash and approximately 0.97 Fox Class A shares for each share held, valuing the offer at $160 US per share. Upon closure, existing Fox shareholders are expected to own about 73% of the combined company, with Roku shareholders holding the remaining 27%.
The transaction is anticipated to be finalized in the first half of the upcoming year, pending approval from both Fox and Roku shareholders, as well as regulatory clearance. Fox’s stock experienced a decline prior to the market opening, while Roku’s shares saw a slight increase.
