Fox Corporation has announced its agreement to acquire streaming service pioneer Roku through a cash-and-stock transaction valued at about $22 billion, which includes debt. This acquisition will grant Fox access to over 100 million global households, the Roku channel, and valuable first-party data.
Fox currently manages a broad network of sports, news, and entertainment alongside Tubi, which was acquired in 2020. Roku was initially launched by Netflix in the early 2000s as Netflix transitioned from DVD rentals to streaming. However, Roku became an independent entity, launching its first set-top box in 2008. Anthony Wood, Roku’s founder, and CEO, pursued this technology inspired by his interest in recording and watching “Star Trek.”
Both Fox and Roku assured that Roku will continue as an open and partner-friendly platform. The companies project that the merged entity will rank as the third-largest player in U.S. television by share of viewing. Fox Corporation CEO Lachlan Murdoch stated that combining Fox’s live news and sports content with Roku’s streaming capabilities expands exposure to advertising and subscriptions.
Anthony Wood highlighted the strategic advantage of merging with Fox, emphasizing the potential to accelerate Roku’s vision, expand its scale, and innovate more aggressively. Wood will maintain his role at the company and join the Fox board of directors post-transaction.
Fox will compensate $96 in cash alongside 0.9693 shares of its Class A common stock per Roku Class A and Class B share. Each Roku share is valued at approximately $160. Post-acquisition, Fox’s existing shareholders are anticipated to own around 73% of the merged company, with Roku shareholders possessing about 27%. The deal’s completion is targeted for the first half of next year, pending endorsement from shareholders and regulatory bodies.
Market reactions showed a decline in Fox’s stock, while Roku shares exhibited a slight increase before the market’s opening.
Leave a Reply