Fox buys Roku for $22 billion

Fox Company Reached a takeover agreement Rocco For approximately $22 billion, representing another chapter in media consolidation as the industry grapples with changing dynamics and growing challenges.

Fox announced Monday that it will acquire Roku for $160 per share in a cash-and-stock deal. Fox plans to finance the cash portion of the deal through a combination of available cash and new debt. The company said it obtained a loan worth $12 billion for this deal.

Fox stock fell 17% in morning trading on Monday. Roku stock fell 2%, though that stock rose 20% on Friday around initial reports of a potential sale.

This combination will combine Fox’s news and sports channels as well as the free, ad-supported streaming software Tubi with Roku, the maker of streaming devices and also home to The Roku Channel, a service similar to Tubi.

Fox CEO Lachlan Murdoch on Monday described the incident as a “defining moment” for the company.

The proposed acquisition comes about seven years after Fox’s last major deal, when it divested its entertainment assets in a $71 billion deal with Fox. Disney. Since then, Fox’s portfolio has been made up primarily of its television channels, namely the Fox Broadcast Network, which has been broadcasting the FIFA World Cup since last week, and the Fox News Channel on cable.

In 2020, Fox acquired Tubi for $440 million. The service has long been the answer to the streaming wars, before the announcement of Fox One, its direct-to-consumer option that launched last year.

In a call with investors on Monday, Murdoch noted that Fox was “an early investor in Roku and a long-time business partner.”

He added that since 2019, Fox has “redirected” the company, focusing on live news and sports, and emphasized a focus on increasing advertising revenue.

Advertising has gained renewed importance for media companies as they look to build streaming platforms and lean into sports and live events that capture the largest audiences.

Murdoch said in a call Monday with investors that the two companies intend to keep Tubi Channel and Roku Channel separate after the deal closes. He called it an “incredibly complementary service” that sees about a third of the overlap in its audience.

Tubi sees the majority of its viewers watching on-demand content, unlike free-to-air channels that mimic a traditional pay-TV package.

“Roku has a very large business platform made up of advertising and subscriptions,” Roku CEO Anthony Wood said on a call Monday.

Wood described Roku’s platform as a market leader in the United States, and said it reaches more than 100 million streaming households globally, with 145 billion hours of engagement annually.

Both Wood and Murdoch said their companies were entering the deal “from a position of strength.”

Murdoch added that adding Roku allows Fox to go into “new markets for expansion, obviously digitally in streaming and subscriptions, and push the business aggressively into the 21st century.”

Fox said Monday it expects to see approximately $400 million in run-rate cost synergies from the deal while raising additional revenue. Following completion of the acquisition, current Fox shareholders will own approximately 73% of the combined company and Roku shareholders will own approximately 27%.

The deal, which has already been approved by the boards of directors of both companies, is expected to close in the first half of 2027.