Fox Corp. (NASDAQ:FOX) has agreed to acquire Roku Inc. (NASDAQ:ROKU) in a cash-and-stock transaction with an enterprise value of approximately $22 billion, combining one of the largest providers of live sports and news content with a leading connected-TV platform.
The acquisition represents a major strategic move as media companies seek greater scale and direct access to streaming audiences amid ongoing shifts in consumer viewing habits.
Roku Shareholders to Receive Cash and Stock
Under the terms of the agreement, Roku shareholders will receive $160.00 per share, consisting of $96.00 in cash and 0.9693 shares of Fox Class A common stock for each Roku share held.
The offer represents a substantial premium for Roku investors and follows a period in which the streaming company had been evaluating strategic alternatives.
Combined Business Expands Reach Across Television and Streaming
The transaction brings together Fox’s portfolio of live programming, including major sports and news properties, with Roku’s streaming ecosystem, which reaches more than 100 million households globally.
The combined company is expected to become the third-largest player in the U.S. television market based on total viewing share.
For Fox, the deal accelerates its transition toward digital distribution following the 2019 sale of much of its entertainment business to Disney. While Fox has maintained strong positions in live content, the acquisition gives it direct access to one of the largest connected-TV audiences in the United States.
The deal also unites Fox-owned Tubi with The Roku Channel, creating a larger free ad-supported streaming television platform.
Executives Highlight Strategic Benefits
“This is a defining moment for FOX,” Lachlan K. Murdoch, Executive Chair and Chief Executive Officer of Fox, said in a statement. He noted that the transaction combines “the most valuable live content portfolio in video consumption with the preeminent streaming platform through which America watches it.”
Anthony Wood, Roku’s founder and chief executive, will join Fox’s board following completion of the transaction and continue to play a role within the enlarged business.
“The combination with FOX is an extraordinary opportunity to accelerate our vision, scale faster and innovate more aggressively,” Mr. Wood said.
Financing Structure and Leverage
To fund the cash component of the acquisition, Fox has secured $12 billion in fully committed bridge financing from Morgan Stanley Senior Funding, Inc., alongside the use of existing cash resources.
Fox said pro forma net leverage is expected to be approximately 2.8 times core earnings at closing, including half of the forecast $400 million in annualised cost synergies.
The company also stated that its dividend and share buyback programmes will continue “uninterrupted” and that it expects to retain its current investment-grade credit rating.
Following completion, Fox shareholders will own approximately 73% of the combined company, while existing Roku shareholders will hold the remaining 27%.
Regulatory Review Expected
The boards of both companies have unanimously approved the transaction.
Because Anthony Wood and related trusts control a majority of Roku’s voting rights, shareholder approval from Roku investors has effectively been secured through a support agreement.
However, the transaction is expected to face regulatory scrutiny, particularly given concerns around vertical integration in the media and technology sectors.
To address potential issues, Fox and Roku said the streaming platform will continue to operate as an “open, partner-friendly platform” for third-party services such as Netflix, Disney+ and Max.
Deal Targeted to Close in 2027
The acquisition is expected to be completed during the first half of 2027, subject to regulatory approvals and approval from Fox shareholders.
Investors reacted cautiously to the announcement, with Fox shares falling 15% following news of the transaction.