Fox Corp. is acquiring streaming platform Roku in a cash-and-stock deal valued at approximately $22 billion. Announced Monday, the transaction will pay $160 per Roku share, consisting of $96 in cash and 0.9693 shares of Fox's Class A common stock. The move is a bet by Lachlan Murdoch that streaming is the company's future, aiming to strengthen Fox's position as audiences move online.
The deal gives Fox access to the Roku channel, first-party data, and more than 100 million global streaming households. By pairing its sports and news programming with Roku's streaming hardware, operating system, and FAST services, Fox aims to better target ads and reduce its reliance on traditional cable distribution. The companies stated that Roku will continue to be run as an open, partner-friendly platform.
The combined company is expected to become the third-largest player in U.S. television by share of viewing. Following the announcement, Fox's stock declined while shares of Roku rose nearly 3%. Once the deal closes, existing Fox shareholders are expected to own approximately 73% of the combined company, with Roku shareholders owning about 27%.
The transaction is subject to regulatory approval and approval from Fox and Roku shareholders. The deal is expected to close in the first half of next year.