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Fox to Buy Roku in $22 Billion Cash-Stock Deal

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Fox to Buy Roku in $22 Billion Cash-Stock Deal

Fox (FOX, FOXA) agreed to acquire Roku (ROKU) in a cash-and-stock deal that values the TV streaming platform at about $22 billion, creating a media and technology entity with one of the largest streaming businesses in the US.

Fox will pay $160 per Roku's share, comprised of $96 in cash and 0.9693 of the media company's class A shares, the companies said in a joint statement on Monday.

Roku's shares declined 2.2% intraday, while Fox's class A and B stock plunged 18% and 17%, respectively.

Roku serves more than 100 million global streaming households through its streaming players, TVs and The Roku Channel. The combined company is expected to become the third largest entity in US television by share of viewing, the companies said. Fox owns the Tubi streaming service.

"This combination will transform the scope of our company into high-growth verticals and yield a step change in our overall growth profile," Fox Chief Executive Lachlan Murdoch said.

The acquisition offers Fox "a wider entry" into the high-growth connected TV segment, especially advertising and streaming subscriptions, the company said. It boosts the media giant's long-term growth and accelerates its digital strategy.

Fox anticipates the deal to generate run-rate cost synergies of $400 million, with revenue upside.

"The combination with Fox is an extraordinary opportunity to accelerate our vision, scale faster and innovate more aggressively for viewers, partners and advertisers," Roku CEO Anthony Wood said. "This transaction offers a significant premium to Roku shareholders while also providing them with the opportunity to participate in the compelling future upside of the combined company."

The transaction, which requires approval from both companies' shareholders and clearance from US and non-US regulators, is expected to complete in the first half of next year. Wood and certain trusts and entities that collectively holding a majority of the voting power at Roku, have agreed to vote in favor of the deal.

Following completion, Fox shareholders are expected to own about 73% of the combined company, with Roku's investors holding the remaining 27% stake. Wood is set to have an "ongoing role" at the combined company.

At the end of April, Roku reported first-quarter net income of $0.57 a share, swinging from a loss of $0.19 the year before. Overall revenue improved 22% to $1.25 billion. At the time, the company said it expected revenue of $5.5 billion for 2026.

Last month, Fox recorded a surprise increase in fiscal third-quarter earnings, while its revenue topped estimates amid distribution growth.

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