Fox Corp is acquiring Roku in a deal valued at approximately $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 reduce its reliance 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 following a family deal last year.
Terms of the deal: how the acquisition is structured
Roku shareholders will receive $96 in cash and approximately 0.97 shares of Fox Class A stock for each Roku share they own, valuing the offer at $160 per share.
This represents a 33.7% premium to Roku’s closing price on Thursday, the day before reports emerged that the company was exploring a sale.
The transaction includes about $14.6 billion in cash and the rest is paid in shares. It also involves approximately $8.3 billion in new debt added to Fox’s balance sheet. The deal is expected to generate annual cost savings of about $400 million.
After the merger, Fox shareholders will own about 73% of the combined company, and Roku investors will own the remainder.
Roku founder and CEO Anthony Wood will continue to serve in the new company and join Fox’s board of directors. 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 fell nearly 17 percent in early trading, likely due to concerns about stock dilution from the deal. Roku shares traded below the offer price of $160 by as much as 12 percent.
Doug Creutz, an analyst at TD Cowen, said: “We tend to be skeptical that this deal will create value for Fox shareholders. The history of content and platform mergers in media has generally been unfavorable.”
He pointed to AT&T’s failed acquisition of Time Warner in 2018, which unraveled three years later, as a cautionary example.
Meanwhile, JP Morgan analyst Cory Carpenter called the deal more positive, saying it could shift Roku’s focus toward digital and address long-term concerns about its presence in pay TV.
What this means for users and why Fox is buying it
Roku and Fox have confirmed that their existing distribution partnerships will remain. Murdoch downplayed potential conflicts of interest, emphasizing that “at the moment we are partners of YouTube, youtube television and Comcast, and that doesn’t change.”
For Roku users, the acquisition is unlikely to result in immediate changes to the device’s functionality or the ecosystem of available apps.
Roku continues to offer streaming apps from competitors like Paramount, NBCUniversal and netflixand Fox has assured that these associations will persist.
The free Roku channel will remain separate from Fox’s Tubi ad-supported streaming platform, signaling that both services will continue to operate under their current brands.
Fox has been working to diversify away from traditional cable distribution as cord cutting accelerates. Last year, the company launched Fox One, a subscription service as part of that effort.
Roku earns revenue primarily through advertising and subscription sales commissions through platforms such as Netflix and Peacock, and serves more than 20 million customers with billing relationships.
If the deal goes through, the combined company would rank as the third-largest television viewer by Nielsen metrics, behind YouTube and Disney and ahead of Netflix.
Fox reports strong demand for its live sporting events, including NFL games, Major League Baseball and the FIFA World Cup. The main strategic reasoning behind the acquisition is to combine 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 stake it has held since 2013.
Approvals and timeline for the Fox-Roku merger
The boards of directors of both companies have given their unanimous approval to the transaction. The deal is expected to close in the first half of 2027, pending regulatory approval and standard closing conditions.
Allen & Company is acting as lead financial advisor to Fox, while Qatalyst Partners is advising Roku as its exclusive financial advisor.
