Lachlan Murdoch’s Fox Corp. and streaming tech powerhouse Roku have entered a definitive agreement under which Fox will acquire Roku for $160 per share in a cash and Fox Class A common stock transaction valuing Roku at approximately $22 billion in enterprise value, the companies said on Monday.
The transaction combines Fox’s sports, news, and entertainment content and the Tubi streaming service with Roku’s connected TV platform, The Roku Channel, first-party data and direct relationship with more than 100 million global streaming households, the deal partners touted.
On a call with analysts, Murdoch, executive chair and CEO of Fox, called the acquisition a “defining moment” for his company, and one that “pairs Fox, the leader in live news and sports, with Roku, the leading connected TV platform. This acquisition will strengthen and expand our position in the high growth digital video ecosystem and unlocks new ways to serve our audiences and partners.”
“Nothing has the upside and the massive scale and opportunity that the transaction has,” Murdoch added. The Roku acquisition follows Fox picking up Tubi in 2020, and, according to the Fox boss, continues a strategy of “focus over scales’ sake” that avoids the media giant getting caught up in the arms race around the streaming industry.
“Our achievements give us great confidence in our ability to enhance growth inside the enlarged Fox Corporation,” Murdoch added. He told analysts Roku will help Fox navigate a fast-evolving streaming sector, to include the continued distribution of Fox and Tubi content: “We are seeing a clear consumer preference for aggregation. Consumers are gravitating towards simpler, more unified experiences on their favorite platforms like Roku.”
On a pro forma basis, the combined company will become the third-largest player in U.S. television by share of viewing, “with an attractive mix of Fox’s sports, news, and entertainment content, alongside streaming services Tubi and The Roku Channel,” the companies said. “That distribution and engagement scale spans every major viewing environment – broadcast, cable, local, and streaming – creating broad and diversified reach that benefits viewers, partners, and advertisers.”
Anthony Wood, founder, chairman and CEO of Roku, also on the analyst call, said his company was entering the transaction from a position of strength. “Put simply, it’s the best way to accelerate our long-term strategy and continue shaping the future of television,” he argued.
“It’s a great price,” Wood added of the rationale for doing the M&A deal at this time. “It allows us to execute on our strategy faster than we would otherwise by ourselves, even though we’re doing extremely well,” he added after being asked why Roku did the sales transaction at this time.
Roku reaches over 100 million households globally with its streaming viewership technology built from the ground up. “We believe Roku and Fox will together be uniquely positioned to deliver the value, personalization and simplicity that viewers want,” Wood insisted.
The deal follows a strategic review by Roku, which settled on Fox as the preferred bidder. “The Fox offer was the right offer for our shareholders and we ran a very complete process and are very happy with the outcome,” Wood told analysts about the formal sales process.
The companies in commentary around the deal highlighted several strategic benefits. One is increased scale and reach, with the firms noting that together, they will “encompass premium live content, broad distribution, and significant audience reach across linear and streaming,” Fox said in an earlier statement.
Murdoch said Roku would remain an open platform as a connected TV service to rival streamers like Netflix and Prime Video after the transaction closes. “It is essential that Roku will remain an open and partner-friendly business,” he added. Wood also chimed in: “We know how to promote our own services, as well as promoting our partner services, and so we intend to continue doing that.”
Fox will take on $8 billion in new debt to fund the transaction, which at its closing is expected to give Fox shareholders a 73 percent ownership of the combined companies. Roku shareholders will retain the remaining 27 percent stake. The Roku acquisition is expected to close in the first half of 2027 and offer an expected $400 million in cost synergies.
Murdoch said it was too early to measure how the Roku deal will impact Fox’s distribution of sport rights across its broadcast and cable properties and drive new revenues across all the platforms. “The discovery of those sport rights can really be assisted with distribution across Roku and discovery through the Roku home screen,” he added.
“We weren’t focused particularly on sport rights in this transaction, but absolutely the combination of Fox and Roku we really think can expand the reach of all our premium content,” Murdoch said. He also argued the transaction will boost distribution of Fox content to help ratings and advertising revenue gains. “The advertising synergies and revenue upsides are significant,” he told analysts.
Roku’s new homescreen.
Roku
Roku is also expected to accelerate Fox’s push into international markets, including recently into Latin America, after a focus on the domestic U.S. market. And the deal is in line with Murdoch’s recent talk about possible acquisitions due to the company’s healthy balance sheet.
The Fox and Roku brands will also be kept separate after the two companies are combined to “continue to serve their viewers in the way they do now,” Murdoch said as Fox will remain neutral about distributing third party content across its platforms.
Wood added the audiences for Roku and Fox are different because content is delivered on different platforms and technologies, and he pointed to “Fox’s commitment to letting Roku continue to do what it does,” and with additional growth capital.
“I would expect that we can grow our viewership in the U.S. with a combination of Roku technology, the Roku platform and tremendous content that’s on the Roku channel, and the content that Fox brings to it as well,” Murdoch said.
On Friday, LightShed Partners analyst Rich Greenfield cited Fox as a potential acquirer of Roku. “Given how tied Fox is to the legacy TV ecosystem, a Roku acquisition would enable Fox to meaningfully reposition its narrative with investors toward a streaming future that began with its Tubi acquisition,” he explained, adding that it was “worth noting that Fox sold its 6 million shares of Roku at $58 back in 2020 to help finance the acquisition of Tubi. In turn, it would definitely be ironic if Fox bought Roku now.”
