BY Richard Summerfield
Fox Corp has agreed to acquire streaming tech company Roku in a cash-and-stock deal worth approximately $22bn.
Under the terms of the deal, Roku shareholders will receive $96 in cash and about 0.97 Fox class A shares for each share held, valuing the offer at $160 per share. That represents a 33.7 percent premium to Roku’s close on Thursday, a day before publications reported it was exploring options including a sale.
The boards of both companies have unanimously approved the transaction, which is expected to close in the first half of calendar year 2027 and will generate around $400m in annual cost savings. The deal will include roughly $14.6bn in cash, with the rest paid in stock, adding about $8.3bn in debt to Fox’s balance sheet.
Upon closing, existing Fox shareholders are expected to own approximately 73 percent of the combined company and Roku shareholders approximately 27 percent.
“This is a defining moment for FOX, and a natural extension of the deliberate and focused strategy we have been executing for nearly a decade,” said Lachlan K. Murdoch, executive chair and chief executive of Fox Corporation. “In 2019, we reoriented the company around live news and sports. In 2020, we acquired Tubi and under our stewardship it has become one of the most successful businesses in streaming. Today, we take the next step: bringing together the most valuable live content portfolio in video consumption with the preeminent streaming platform through which America watches it.
“This combination will transform the scope of our company into high-growth verticals and yield a step change in our overall growth profile,” he continued. “And we are executing this acquisition from a position of financial strength – maintaining our investment grade balance sheet while providing our shareholders with an uninterrupted return of capital program in the form of share buybacks and dividends. Roku pioneered streaming TV and scaled it into a leading CTV platform. Together, we intend to lead its next chapter.”
“Over the past two decades, we’ve built Roku into the leading TV streaming platform, reaching more than 100 million households globally and reshaping how people discover and enjoy entertainment,” said Anthony Wood, founder, chairman and chief executive of Roku. “I’m incredibly proud of what our team has built, and the combination with FOX is an extraordinary opportunity to accelerate our vision, scale faster and innovate more aggressively for viewers, partners and advertisers.
“That’s why our Board of Directors unanimously determined after concluding its strategic review process that 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,” he added.
Roku is the biggest streaming platform for smart TVs in the US, running on more than a quarter of internet-connected devices, according to research firm Park Associates. The company was something of trailblazer when it came to offering streaming services to mass audiences, with its operating system offering users access to apps to a multitude of streaming services such as Netflix and Amazon Prime, as well as its own channel. Globally, more than 100 million households stream with Roku.
News: Fox strikes $22 billion deal for Roku to fuel streaming push