Fox Corp. to Acquire Roku in $22 Billion Deal
Fox Corp. has announced a plan to purchase Roku in a cash-and-stock arrangement worth about $22 billion, which includes debt. The streaming platform will remain operational as an open, partner-friendly entity, and there don’t seem to be any immediate changes expected for customers. Together, Fox and Roku will become the third-largest contender in U.S. television in terms of viewing share.
Earlier, reports surfaced indicating that Roku was exploring its options, possibly considering a sale. Speculation about potential buyers had been buzzing, pointing to companies like Netflix, Amazon, Comcast, and Disney, alongside Fox.
This acquisition gives Fox access to over 100 million households globally, along with the Roku channel and its first-party data. Fox has a large portfolio that includes sports, news, and entertainment, as well as Tubi, which Fox acquired in 2020.
Roku’s founder, Anthony Wood, initially worked at Netflix in the early 2000s when it was transitioning from DVD rentals to streaming. Roku was spun off from Netflix, launching its first set-top box in 2008. Wood, who serves as Roku’s chairman and CEO, mentioned that his initial motivation for pursuing this technology was to record and watch his favorite show, “Star Trek.”
Lachlan Murdoch, CEO of Fox Corp., stated that the merger would blend Fox’s live news and sports content with a substantial streaming platform. This combination is anticipated to enhance Fox’s advertising reach and streaming subscriptions.
Wood expressed excitement about the merger, noting it as an extraordinary chance to advance their vision, accelerate growth, and innovate for viewers, partners, and advertisers. After the deal closes, Wood will retain a role in the company and join the Fox board.
During a conference call, Murdoch shared that the combined entity is positioned more favorably for the evolving video landscape than either could achieve independently. He expressed confidence, saying it’s the right time and decision.
Fox plans to offer $96 in cash and 0.9693 shares of its Class A common stock for each Roku Class A and B share, valuing the transaction at approximately $160 per Roku share. Once finalized, existing Fox shareholders will hold about 73% of the new company, while Roku shareholders will have around 27% ownership.
The deal is expected to conclude in the first half of next year, pending approval from shareholders of both companies and regulatory bodies. Notably, Fox’s stock fell slightly before the market opened, while Roku’s shares saw a minor uptick.
