Fox has agreed to purchase Roku, a leading streaming company, in a transaction worth around $22 billion US, incorporating debt and a mix of cash and stock. This acquisition will grant Fox entry into over 100 million households worldwide, along with access to Roku’s channel and valuable first-party data. Fox, known for its extensive sports, news, and entertainment network, also acquired Tubi in 2020.
Roku’s founder, Anthony Wood, previously worked with Netflix in the early 2000s during the transition from DVD rentals to video streaming. Following its spin-off from Netflix, Roku introduced its first set-top box in 2008. Wood, now serving as Roku’s chairman and CEO, was inspired by his love for the TV show “Star Trek” in his pursuit of developing streaming technology.
Recognized as a pioneer in bringing streaming platforms like Netflix and YouTube to television through connected devices and smart TVs, Roku primarily generates revenue through advertising and subscriptions from streaming apps on its platform, including the free-to-watch Roku Channel. In the first quarter, advertising accounted for the largest share of revenue, totaling $613 million, marking a 27% increase year-over-year.
Both companies disclosed that Roku will remain an open and partner-friendly platform post-acquisition. The merger positions the combined entity as the third-largest player in U.S. television viewership share. Fox’s CEO, Lachlan Murdoch, emphasized the synergies between Fox’s live news and sports content and Roku’s expansive streaming platform, enhancing advertising opportunities and subscription services for Fox.
Anthony Wood expressed enthusiasm about the collaboration with Fox, highlighting the potential to accelerate innovation and scale for viewers, partners, and advertisers. Wood will maintain an active role in the company and join Fox’s board of directors post-transaction closure.
Industry analyst Paolo Pescatore from PP Foresight noted that the acquisition strengthens Fox’s presence in the ad-supported streaming sector, enabling enhanced control over discovery, data, and monetization amidst the evolving TV viewing landscape. The deal terms entail Roku investors receiving $96 US in cash and approximately 0.97 Fox Class A shares per share held, valuing each share at $160 US.
Upon completion of the deal, existing Fox shareholders are projected to hold about 73% of the combined company, with Roku shareholders owning the remaining 27%. The transaction is slated for closure in the first half of the upcoming year, pending approvals from both Fox and Roku shareholders, as well as regulatory clearance. While Fox’s stock experienced a decline pre-market, Roku’s shares saw a slight uptick in value.