Fox to acquire Roku in $22 billion deal to create streaming and live content powerhouse #
Fox said it struck a deal to buy Roku in a cash-and-stock transaction valued at about $22 billion.
The deal values Roku at $160 a share, a 34% premium to where the stock had closed before reports surfaced Friday that Roku was exploring a sale, sending shares 20% higher on Friday.
On Monday, the stock edged lower to around $140, as investors digested the risk profile and timeline of the deal. The unseasonably elevated cost of funding equity positions amid elevated issuance and growth of leveraged ETFs may also be dampening the appeal of merger arbitrage strategies.
Fox stock dropped 17%, putting it at down roughly 25% so far this year.
The deal, expected to close in the first half of calendar year 2027, will expand Fox’s digital footprint as traditional cable continues to shrink. The merger would give Fox direct access to more than 100 million streaming households globally. Once the transaction closes, existing Fox shareholders will hold a roughly 73% stake in the combined company, with Roku shareholders owning the remaining 27%.
Fox has spent the past several years building out its streaming strategy through Tubi and, more recently, FOX One, its direct-to-consumer sports and news product. Just last week, Roku added FOX One as a premium subscription inside its Roku Channel, expanding distribution ahead of the FIFA World Cup.
Roku, meanwhile, has been trying to prove it can turn its scale into consistent profits. Roku generated $613 million in ad revenue in its latest quarter, up 27% year over year.
Roku had surged during the pandemic as investors piled into streaming winners and Roku was one of the beneficiaries of the stay-at-home boom. But it has given back much of those gains.
Fox CEO Lachlan Murdoch called the acquisition “a defining moment” that combines Fox’s strength in live content with Roku’s streaming scale and platform reach. “This combination will transform the scope of our company into high-growth verticals and yield a step change in our overall growth profile,” he said in the announcement.
Roku CEO Anthony Wood said the deal would help accelerate Roku’s long-term growth while maintaining its position as an open platform.