Fox Corp. has struck a deal to acquire streaming pioneer Roku in a combined cash-and-stock transaction valued at approximately $22 billion, including debt.
The acquisition would hand Fox access to more than 100 million households around the world, along with the Roku channel and its first-party viewer data. Fox already operates a broad portfolio of sports, news, and entertainment properties, as well as Tubi, the streaming service it purchased in 2020.
Roku’s origins trace back to the early 2000s, when founder Anthony Wood worked inside Netflix as the company was making its historic transition away from DVD rentals and toward streaming video. Netflix eventually spun Roku off as its own company, and Roku launched its first set-top streaming box in 2008.
Wood, who serves as Roku’s chairman and CEO, has said his original drive to develop the technology came from a personal desire — he simply wanted to record and watch his favorite show, “Star Trek.”
Both companies announced Monday that Roku will continue operating as an open platform that remains friendly to outside partners. Together, Fox and Roku said the combined entity would rank as the third-largest presence in U.S. television based on share of viewing.
Fox Corp. CEO Lachlan Murdoch said in a statement that bringing the two companies together would unite Fox’s live news and sports programming with a streaming platform boasting a massive audience, while also expanding Fox’s reach into advertising revenue and streaming subscriptions.
“The combination with FOX is an extraordinary opportunity to accelerate our vision, scale faster and innovate more aggressively for viewers, partners and advertisers,” Wood said in prepared remarks.
Wood is expected to remain involved with the company going forward and will join Fox’s board of directors once the transaction is finalized.
Under the terms of the deal, Fox will pay $96 in cash plus 0.9693 shares of its Class A common stock for each Roku Class A and Class B share. The overall transaction is valued at $160 per Roku share.
Once the deal closes, current Fox shareholders are projected to hold roughly 73% of the combined company, while Roku shareholders would own approximately 27%.
The transaction is expected to be completed in the first half of next year, pending approval from shareholders of both companies and sign-off from regulators.
Following the announcement, Fox’s stock slipped in pre-market trading, while Roku shares edged slightly higher.
