Fox has agreed to purchase Roku, a leading streaming company, in a deal valued at around $22 billion US, which includes debt. With this acquisition, Fox will gain access to over 100 million global households, the Roku channel, and its first-party data. The company, known for its extensive sports, news, and entertainment network, as well as Tubi, acquired in 2020, continues to expand its reach.
Roku’s founder, Anthony Wood, previously part of Netflix during its transition from DVD rentals to streaming in the early 2000s, later spun off to establish Roku in 2008, releasing its first set-top box. Wood’s inspiration stemmed from a desire to record and watch the show “Star Trek.”
As a pioneer in bringing streaming services like Netflix and YouTube to television through connected devices and smart TVs, Roku primarily generates revenue through advertising and subscription fees from streaming apps on its platform. The company also operates the free-to-watch Roku Channel.
The deal, aiming to position the combined entity as the third-largest player in U.S. television viewership, emphasizes the continuation of an open and partner-friendly platform under Fox’s leadership. The integration is expected to merge Fox’s live news and sports content with Roku’s extensive viewership, enhancing advertising and subscription opportunities for Fox.
Wood expressed enthusiasm about the partnership, highlighting the potential for accelerated growth and innovation for viewers, partners, and advertisers. Analysts predict that Fox’s acquisition of Roku will strengthen its presence in the ad-supported streaming market, offering enhanced control over content discovery, data utilization, and monetization strategies amidst evolving TV viewing patterns.
Under the terms of the agreement, Roku investors will receive $96 US in cash and approximately 0.97 Fox Class A shares for each share held, totaling $160 US per share. Post-transaction closure, Fox shareholders are anticipated to own roughly 73% of the combined entity, with Roku shareholders holding the remaining 27%.
The closing of the deal, scheduled for the first half of the following year, is subject to approval from both Fox and Roku shareholders, as well as regulatory clearance. Fox’s stock experienced a decline prior to market opening, whereas Roku’s shares saw a slight increase.