Fox Corporation (NASDAQ:FOXA) (NASDAQ:FOX) on Monday agreed to acquire Roku Inc. (NASDAQ:ROKU) in a cash-and-stock transaction valued at approximately $22 billion in enterprise value.
Following the announcement, the stock plummeted nearly 10%.
The move is designed to expand Fox's presence in streaming and connected television while combining its sports, news, and entertainment portfolio with Roku's platform and audience reach.
Anthony Wood, Roku's founder, chairman, and CEO, will continue to have a role at the combined company and is expected to join the Fox board of directors after the transaction closes.
The transaction is expected to close in the first half of calendar year 2027.
Deal Brings Together Content And Distribution
The companies said the transaction will unite Fox's live sports, news, and entertainment assets, including Tubi, with Roku's connected TV platform, The Roku Channel, first-party data capabilities, and relationships with more than 100 million streaming households globally.
The companies also stated that Roku will continue operating as an open, partner-friendly platform while Fox content will remain broadly distributed.
Combined Company Targets Greater Scale
On a pro forma basis, the merged company is expected to become the third-largest player in U.S. television by share of viewing.
Fox highlighted Roku's reach across more than half of U.S. broadband households and said the combination will pair that distribution scale with premium live content, including NFL, MLB, NASCAR, Big Ten, and FIFA World Cup rights, along with FOX News and FOX Business.
The acquisition is also expected to strengthen Fox's position in connected TV advertising, streaming subscriptions, and other high-growth digital segments.
Transaction Terms And Financial Impact
Under the agreement, Roku shareholders will receive $160 per share, consisting of $96 in cash and 0.9693 shares of Fox Class A common stock for each Roku share.
Fox Corporation reported $3.601 billion in cash and cash equivalents as of March 31, 2026.
Following the close, existing Fox shareholders are expected to own approximately 73% of the combined company, while Roku shareholders will own about 27%.
Fox expects the deal to be accretive to free cash flow per share by the second full year after closing and to generate roughly $400 million in annualized cost synergies, with potential additional revenue opportunities.
Recently, Roku reported first-quarter revenue of $1.248 billion (up 22%) and guided second-quarter revenue to $1.295 billion, above the $1.285 billion Street view.
The company also raised its full-year revenue outlook to $5.535 billion, with Platform revenue at $5.0 billion and Devices revenue at $535 million.
FOX Price Action: Fox shares were down 9.49% at $53.33 during premarket trading on Monday, according to Benzinga Pro data.
Photo by Piotr Swat via Shutterstock
Login to comment