- Fox will buy Roku for $160 per equity in a combination of cash and Class A common stock.
- The transaction has been approved unanimously by the Boards of Directors of both Fox and Roku.
- Fox will likely fund the cash portion of the transaction with a combination of new debt and cash on hand.
Fox will acquire streaming technology powerhouse Roku in a cash-and-stock deal valued at almost $22 billion. The combined company will become the third-largest player in US television.
Fox will buy Roku for $160 per equity in a combination of cash and Fox Class A common stock, the company said in a release.
The transaction will combine Fox's sports and news programming with Roku's leading connected TV platform, The Roku Channel, which has more than 100 million global streaming households.
“Together, FOX and Roku will create a scaled next-generation media and technology company positioned at the intersection of two of the most important forces reshaping video consumption: the enduring primacy of live sports and news, and the continued rise of streaming,” the company stated.
The $160 price represents a premium of 11.4% compared to Roku's last close, CNBC reported.
Fox's stock was down 8% in premarket trade. Roku's shares were halted.
The transaction has been approved unanimously by the Boards of Directors of both firms. The deal is expected to close in the first half of 2027.
Once the deal is finalised, existing FOX shareholders will own almost 73% of the combined company and Roku shareholders the remaining 27%.
Roku is one of the first firms to bring streaming platforms like YouTube and Netflix to TV via smart TVs and connected devices.
Its business is largely driven by subscription and advertising revenue from streaming apps on its platform. Advertising is the largest earner, with revenue up by 27% year-on-year to $613 million in the first quarter.
The move is expected to enhance Fox's long-term growth and provide it with a bigger entry into the segment of connected TV, especially advertising and streaming subscriptions.
The acquisition will create a more powerful streaming platform as well, bringing together Roku's consumer interface platform technology and direct viewer relationships with Fox's premium content and advertising capabilities.
Fox will likely fund the cash portion of the deal with a combination of cash on hand and new debt. The company has obtained fully committed bridge financing worth $12 billion from Morgan Stanley Senior Funding, Inc.
Additional details regarding the financing will be included in both firms' filings with the US Securities and Exchange Commission.
Anthony Wood, the founder, chairman and CEO of Roku, will have an ongoing role at the combined company. After the close of the transaction, he will join the FOX Board of Directors
