Fox Corp. agreed to acquire Roku Inc. in a deal that values the streaming video platform at about $22 billion including debt, creating a new television juggernaut that will control content and distribution and allow it to better compete with major streaming platforms in advertising.
The deal will blend Fox's sports, news and entertainment channels, including the free, ad-supported Tubi, with Roku's platform of more than 100 million subscribers, the companies said in a statement Monday.
The acquisition will create the third-largest player in the US television market by share of viewing, with distribution spanning broadcast, cable, local and streaming, the companies said. Combining Tubi with Roku creates a powerhouse of free, ad-supported streaming in an era when viewers are increasingly shifting to viewing on demand.
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“This combination will transform the scope of our company into high-growth verticals and yield a step change in our overall growth profile,” Fox Chief Executive Officer Lachlan Murdoch said in the statement.
According to terms of the deal, Fox will pay $96 in cash and 0.9693 Fox Class A shares per Roku share. The stock consideration represents $64 per Roku share based on the 10-day volume-weighted average price of Fox common stock as of June 10. Roku shares jumped 20% on Friday after Bloomberg reported Roku was in talks on a sale. On Monday, Roku shares rose about 1% to $145.25 in premarket trading while Fox shares slumped 13%.
Roku's streaming devices helped usher in the era of digital home entertainment by allowing consumers to stream content from apps including Netflix and HBO Max on their televisions, essentially transforming any TV into a smart TV. The company also sells branded TVs, projectors and has its own streaming channel. Its streaming devices are used “by more than half of all US broadband households,” Roku said in a statement in April.
Roku makes most of its money selling digital advertising and distributing streaming services, with device sales contributing a much smaller portion of revenue. The platform segment generated $4.1 billion, or 87.5%, of the company's revenue last year, slightly more than the previous year.
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The combination with Fox will allow it to better target advertising campaigns as budgets continue to shift to streaming from traditional broadcasting. Fox bought Tubi in 2020 to bolster its streaming business, and it has since become a significant growth engine.
The deal is expected to close in the first half of 2027. Fox received $12 billion in fully committed bridge financing from Morgan Stanley Senior Funding for the deal, according to the statement.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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