Fox to Acquire Roku in $22 Billion Cash-and-Stock Deal, Combined Company Becomes Third-Largest TV Player
Fox Corp is acquiring Roku in a deal valued at roughly $22 billion, combining cash and stock, the companies announced.
The acquisition will give Fox direct access to Roku's more than 100 million households, along with expanded ad targeting data and a way to lessen its dependence on traditional cable distribution. The deal is expected to close in the first half of 2027.
This transaction marks Fox CEO and Chairman Lachlan Murdoch's first major acquisition since he solidified control of the media company after a family settlement last year.
Deal Terms: How The Acquisition Is Structured
Roku shareholders will receive $96 in cash and approximately 0.97 Fox Class A shares for each Roku share they own, valuing the offer at $160 per share.
This represents a 33.7% premium over Roku's closing price on Thursday, the day before reports emerged that the company was exploring a sale.
The transaction includes around $14.6 billion in cash, with the rest paid in stock. It also involves roughly $8.3 billion in new debt added to Fox's balance sheet. The deal is expected to bring annual cost savings of about $400 million.
After the merger, Fox shareholders will own approximately 73% of the combined company, with Roku investors holding the remainder.
Roku founder and CEO Anthony Wood will continue in a role at the new company and will join Fox's board. Based on his 55% voting stake, Wood could potentially earn up to $3 billion from the sale.
How Investors and Analysts Are Responding
Fox shares dropped nearly 17 percent in early trading, likely due to concerns about stock dilution from the deal. Roku shares traded below the $160 offer price by as much as 12 percent.
TD Cowen analyst Doug Creutz noted, "We tend to be skeptical that this deal will generate value for Fox shareholders. The history of content and platform mergers in media has generally been unfavorable."
He pointed to AT&T's unsuccessful 2018 acquisition of Time Warner, which was unwound three years later, as a cautionary example.
Meanwhile, J.P. Morgan analyst Cory Carpenter considered the deal more positive, saying that it could shift Roku's focus toward digital and address long-term concerns about its presence in PayTV.
What This Means for Users And Why Fox Is Buying It
Roku and Fox have confirmed that their existing distribution partnerships will remain in place. Murdoch downplayed potential conflicts of interest, emphasizing that "we're partners right now with YouTube, YouTube TV and Comcast, and that doesn't change."
For Roku users, the acquisition is unlikely to lead to immediate changes in device functionality or the available app ecosystem.
Roku continues to offer streaming apps from competitors such as Paramount, NBCUniversal, and Netflix, and Fox has assured that these partnerships will persist.
The free Roku Channel will remain separate from Fox's ad-supported streaming platform Tubi, indicating that both services will keep operating under their current brands.
Fox has been working to diversify away from traditional cable distribution as cord-cutting picks up pace. Last year, the company launched Fox One, a subscription service as part of that effort.
Roku primarily earns revenue through advertising and commissions on subscription sales via platforms like Netflix and Peacock, servicing more than 20 million customers with billing relationships.
If the deal goes through, the combined company would rank as the third-largest TV viewer by Nielsen’s metrics, behind YouTube and Disney and ahead of Netflix.
Fox reports strong demand for its live sports events, including NFL games, Major League Baseball, and the FIFA World Cup. The main strategic reasoning behind the acquisition is combining that content with Roku's audience reach.
Fox is already familiar with Roku. In 2020, Fox financed its $440 million purchase of Tubi by selling a 5% stake in Roku, a holding it has maintained since 2013.
Approvals and Timeline for the Fox–Roku Merger
Both companies' boards have given their unanimous approval for the transaction. The deal is expected to close in the first half of the year 2027, pending regulatory approval and standard closing conditions.
Allen & Company is serving as the lead financial adviser to Fox, while Qatalyst Partners is advising Roku as its exclusive financial adviser.
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Archaeologists are going to be digging the remains of anti-competition laws. I’m tired.
This is a big one for streaming. And it is truly big. FOX bought themself the most popular streaming distribution platform. And they own Tubi too. They are consolidating free/freemium streaming services. The next logical step is to move their remaining cable channels on ROKU and Tubi with free and paid tiers and delist from pure cable networks.
Anyway, there will be less competition on free (ad-supported) streamers. Now it’s Paramount (Pluto) vs. FOX (Roku and Tubi). The rest of the free streaming services are too small. Amazon removed its free streaming service for reasons unknown. Coogle Freeplay did not work numberwise.
I wonder if FOX would merge Tubi and Roku Channel. Keeping two similar services provides the illusion of competition, but running one costs less money. Or maybe they will do the same thing that Paramount did with Pluto by taking some of the best old stuff and creating a $3 a month ad-free subscription service. So Roku Channel, with its live service and majority of content, will remain ad-supported, but Tubi will lose some less-performing content and become an entry-level paid service. Some changes will be made for sure.
Since Fox is the owner of Tubi one of the most popular free streaming services, Fox has shown that they can provide a very good free streaming service. I am sure Fox will pretty much leave the Roku platform mostly as it is, probably some changes to the advertisements on the home screen and the highy possible addition of some of the Fox streaming serivces add to Roku for free.