Roku is acquired by Fox in a billion-dollar deal worth US$22 billion to boost streaming strategy
A transaction valued at approximately US$22 billion sealed the purchase of the Roku platform by Fox Corp, as disclosed in a recent announcement. The deal aims to significantly strengthen the media company’s presence in the streaming market, expanding its reach to millions of homes.
Fox Corp, a giant in the communications sector, formalizes the acquisition of Roku through a package of cash and shares, reinforcing its conviction that the union between its renowned sports and journalistic content and one of the leaders in internet television platforms will solidify its position in a scenario where the public migrates massively to the digital environment.
With the agreement, notified this Monday, Fox gains direct access to more than 100 million homes that use Roku’s streaming services. This move is strategic for the company, historically dependent on cable television, allowing for more precise targeting of its advertisements and reducing its vulnerability to traditional distribution models.
This milestone represents the first major acquisition of Fox since Lachlan Murdoch, its CEO and chairman, consolidated control of the vast media empire built by his father, Rupert Murdoch, following a family restructuring the previous year.
This Monday, executive Lachlan Murdoch described the partnership with Roku as a “defining moment” for Fox. He emphasized that the union brings together “the most valuable live content portfolio in video consumption with the main streaming platform through which Americans watch it”.
Stock markets reacted to the announcement, with Fox shares falling 8% in pre-market trading. On the other hand, Roku’s shares increased by 2.6%, reaching US$147.5, despite remaining below the offer price set at US$160 per share.
Roku, a pioneer in bringing streaming giants like Netflix and YouTube to televisions through connected devices and smart TVs, has its business model supported mainly by advertising revenue and application subscriptions on its platform. The company also offers the Roku Channel, a free service.
Advertising appears as Roku’s main revenue pillar, generating US$613 million in the first quarter, a 27% growth compared to the same period of the previous year.
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Regarding the details of the transaction, Roku investors will receive $96 in cash and approximately 0.97 Class A shares of Fox for each share they own, which brings the total value of the offering to $160 per share.
Despite Fox’s strong leadership in the cable TV segment, driven by its sports programming and the acclaimed Fox News channel, its presence in the streaming universe has been limited to the free Tubi service. This comes at a crucial time, where the migration of consumers from cable TV to digital platforms is accelerating.
The Roku acquisition promises to give Fox a significant boost in the advertising-supported streaming market. Companies involved in the negotiation project that the entity resulting from the merger will position itself as the third largest in the television sector in the United States in terms of audience.
According to Paolo Pescatore, analyst at PP Foresight, “This gives Fox increased control over discovery, data and monetization at a time when television audiences continue to move away from traditional channels.”
Fox shareholders will have a roughly 73% stake in the combined company upon completion of the deal, while Roku investors will own the remaining stake.
The boards of directors of both corporations unanimously approved the transaction, with completion expected in the first half of 2027. The agreement is expected to generate annual cost savings of approximately US$400 million.
To finance the cash portion of the acquisition, Fox plans to draw on new debt and its cash resources, supported by a $12 billion bridge financing already secured by Morgan Stanley.
