Fox has agreed to acquire the streaming pioneer Roku in a deal worth around $22 billion US, including debt, to gain access to over 100 million global households and the Roku channel. The agreement will also provide Fox with first-party data and expand its reach in the sports, news, and entertainment sectors, including Tubi, which Fox acquired in 2020.
Roku’s founder, Anthony Wood, who previously worked at Netflix during its transition from DVD rentals to streaming, established Roku in 2008 after it was spun off by Netflix. Wood’s inspiration for developing the technology stemmed from his desire to watch and record his favorite show, “Star Trek.”
As one of the early pioneers in bringing streaming services like Netflix and YouTube to television via connected devices and smart TVs, Roku primarily generates revenue from advertising and subscription fees from streaming apps on its platform, including the ad-supported Roku Channel.
Advertising accounts for a significant portion of Roku’s revenue, amounting to $613 million in the first quarter, marking a 27% increase year-over-year. The companies announced that Roku will remain an open and partner-friendly platform, positioning the combined entity as the third-largest player in U.S. television viewership.
Fox’s CEO, Lachlan Murdoch, emphasized the strategic benefits of merging with Roku, combining Fox’s live news and sports content with Roku’s extensive streaming viewership. The collaboration is expected to enhance Fox’s exposure to advertising and streaming subscriptions.
Anthony Wood expressed enthusiasm about the merger, highlighting the opportunity to accelerate innovation and scale more rapidly for viewers, partners, and advertisers. Wood will continue to play a role in the company and join the Fox board of directors post-transaction closure.
Analyst Paolo Pescatore from PP Foresight noted that the acquisition of Roku strengthens Fox’s presence in the ad-supported streaming market, providing enhanced control over content discovery, data, and monetization amid the ongoing shift in TV viewing habits.
Under the terms of the deal, Roku investors 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. Following the transaction, existing Fox shareholders are projected to own approximately 73% of the combined company, with Roku shareholders holding the remaining 27%.
The deal is slated to close in the first half of the next year, pending approval from both Fox and Roku shareholders, as well as regulatory clearance. Fox’s stock experienced a decline before the market opening, while Roku’s shares saw a slight increase.