Fox has reached an agreement to acquire Roku, a leading streaming platform, in a deal worth approximately $22 billion US, including debt. This acquisition will provide Fox with access to over 100 million global households and the Roku channel, enhancing its portfolio that includes a vast sports, news, and entertainment network, as well as Tubi, acquired in 2020.
Roku was founded by Anthony Wood, who previously worked at Netflix during its transition from DVD rentals to video streaming in the early 2000s. After being spun off by Netflix, Roku launched its first set-top box in 2008. Wood, now the chairman and CEO of Roku, was inspired by his love for the show “Star Trek” to pursue streaming technology.
As one of the pioneers in bringing streaming services like Netflix and YouTube to TVs through connected devices and smart TVs, Roku generates revenue primarily from advertising and subscriptions from streaming apps on its platform. The company also operates the free Roku Channel.
With advertising as its main revenue source, Roku reported $613 million in revenue in the first quarter, marking a 27% increase year-on-year. Following the acquisition, Fox and Roku stated that the combined entity will become the third-largest player in U.S. television viewership share.
Lachlan Murdoch, CEO of Fox, highlighted the synergy between Fox’s live news and sports content and Roku’s extensive streaming audience, providing Fox with enhanced advertising and subscription opportunities. Anthony Wood expressed his excitement about the partnership with Fox, emphasizing the potential for accelerated growth and innovation for viewers, partners, and advertisers.
Under the deal terms, Roku investors will receive $96 US in cash and approximately 0.97 Fox Class A shares for each share held, valuing the offer at $160 US per share. Following the transaction, current Fox shareholders are expected to own around 73% of the combined company, with Roku shareholders holding approximately 27%.
The deal is subject to approval from both Fox and Roku shareholders, as well as regulatory authorities. Anticipated to close in the first half of the upcoming year, the acquisition saw a decline in Fox’s stock price before the market opening, while Roku’s shares experienced a slight increase.
