Fox's Bold $22 Billion Roku Acquisition Rocks Streaming World!

Fox Corp. has announced a monumental acquisition of Roku, agreeing to buy the streaming platform for $22 billion in a strategic move to significantly enhance its presence in the streaming world. The deal, valued at $160.00 per share, will be a combination of cash and Fox Class A common stock, giving Roku an enterprise value of approximately $22 billion. Expected to close in the first half of calendar year 2027, this acquisition is poised to combine Fox’s robust portfolio of sports, news, and entertainment content, alongside its Tubi streaming service, with Roku’s leading connected TV platform, the Roku Channel, first-party data, and direct access to over 100 million global streaming households.

Lachlan Murdoch, Fox’s executive chair and CEO, described the acquisition as a “defining moment” and a “natural extension of the deliberate and focused strategy” Fox has pursued for nearly a decade. This marks a notable shift for Murdoch, who had previously expressed ambivalence towards streaming, emphasizing traditional broadcast and cable content. He stated that the pact creates “a company better positioned for the next decade of video than either of us would be alone.” The acquisition is expected to transform Fox into high-growth verticals, significantly boosting its overall growth profile by bringing together “the most valuable live content portfolio in video consumption with the preeminent streaming platform through which America watches it.”

Under the terms of the deal, Fox will pay approximately $14.2 billion in cash ($96.00 per share) and offer 0.9693 shares of Fox Class A common stock for each outstanding Roku Class A and Class B share. Upon closing, existing Fox shareholders are projected to own about 73% of the combined entity, with legacy Roku shareholders holding roughly 27%. Fox anticipates the combined company to achieve a pro-forma net leverage ratio of approximately 2.8x, inclusive of 50% credit for run-rate cost synergies. To fund the cash portion, Fox has secured $12.0 billion of fully committed bridge financing from Morgan Stanley, along with new debt and cash on hand. The company expects the Roku deal to be accretive to free cash flow per share by the second full year after closing, specifically by 2029, and forecasts $400 million in annual run-rate cost synergies with additional revenue upside.

Anthony Wood, Roku’s founder, chairman, and CEO, will maintain an ongoing role within the combined company and will join the Fox board post-transaction. Wood expressed pride in Roku’s achievement of building a leading TV streaming platform reaching over 100 million households globally. He emphasized that the combination with Fox presents an extraordinary opportunity to accelerate Roku’s vision, scale faster, and innovate more aggressively for viewers, partners, and advertisers. Roku’s board of directors unanimously approved the sale, concluding that the transaction offers a significant premium to Roku shareholders while allowing them to participate in the future upside of the combined company.

The combined company is projected to become the third-largest player in U.S. TV by share of viewing. This move is particularly significant as advertisers shift budgets from traditional cable networks to streaming video. According to research firm William Blair, the tie-up will provide Fox “with a strategic TV operating system while likely being able to get more leverage on the advertising business.” Madison & Wall consultancy estimates that the combined entity would achieve $9 billion of pro forma advertising revenue, representing about 14% of all spending on U.S. television, and approximately 16% of U.S. streaming advertising revenue by integrating Fox’s Tubi service with the Roku Channel.

Roku, founded in 2002, has been a pioneering and independent player in the streaming-devices space, competing against tech giants like Amazon, Google, Samsung, and Apple. After years of striving for profitability, Roku reported its first full-year profit in 2025, with a net income of $88.4 million on revenues of $4.74 billion, a 15% year-over-year increase. As of March, Roku boasted $1.65 billion in cash and equivalents and no debt. Fox Corp. was previously an investor in Roku but sold its 5% stake in 2020 when it acquired Tubi for $440 million.

This acquisition transforms Fox into a distributor as well as a content provider, creating a “closed-loop connected TV advertising engine.” This new position could also strengthen Fox’s hand in negotiations for sports rights with leagues like the NFL and Major League Baseball, which are eager to reach viewers through new media outlets. Despite this potential, Murdoch stated that sports rights were not the primary impetus for the acquisition and that he does not foresee the deal altering the distribution of sports across broadcast, cable, and Fox One.

Regarding Fox’s existing streaming portfolio, which includes Tubi, Fox Nation, and Fox One, Murdoch indicated that the acquisition of Roku does not necessarily remove the need for these stand-alone outlets. He noted that Tubi and Roku currently have only about a one-third audience overlap, emphasizing that “They are not identical services” and Tubi garners a significant portion of its audience on platforms other than Roku. Ultimately, Murdoch believes that buying Roku will make Fox a more formidable force in the media sector, stating that the deal “will help define the future of television.”