By Milana Vinn, Dawn Chmielewski, Harshita Mary Varghese and Aditya Soni
June 15 (Reuters) – Fox Corp is buying Roku in a cash-and-stock deal valued at about $22 billion, marking a significant bet for the broadcaster that the streaming platform will strengthen its advertising business and expand online reach for its sports and news content.
The deal, announced on Monday, gives Fox access to the more than 100 million households using Roku’s platform, potentially helping the cable TV-reliant media company build a larger digital audience, better target ads, and reduce its reliance on traditional distribution.
It is Fox’s first major acquisition since CEO and Chairman Lachlan Murdoch cemented control over the media empire his father Rupert Murdoch built, following a family settlement last year.
Combining these companies “will really help define the future of television in the United States and in many other markets around the world,” CEO Lachlan Murdoch said on a call with investors.
Fox shares fell nearly 17% in early trading, likely on concerns about stock dilution from the deal. Roku was trading below the offer price of $160 per share by as much as 12%.
Under the agreement, Roku investors will receive $96 in cash and about 0.97 Fox Class A shares for each share held, valuing the offer at $160 per share. That represents a 33.7% premium to Roku’s close on Thursday, a day before publications including Reuters reported it was exploring options including a sale.
Roku founder and CEO Anthony Wood, 60, will continue to play a role in the company and will get a seat on Fox’s board, the companies announced. Roku’s board initiated the sale process earlier this year, and Wood, who controls more than 55% of Roku’s voting rights, agreed to explore a sale, according to three people with direct knowledge of the matter. As part of its sale process launched nearly two months ago, Roku, with the help of investment bankers at Qatalyst Partners, reached out to several prospective buyers, including Fox, two of the sources said. Roku did not respond to a request for comment.
Wood stands to make as much as $3 billion on the sale.Â
CONTENT VERSUS DISTRIBUTION
The transaction unites two distinct businesses in a combination that might complicate existing partnerships.
Roku, a content distributor, carries streaming apps from Fox competitors like Paramount, NBCUniversal, Netflix and others. In turn, Fox, a major producer of sports and news programming, licenses its content to pay-TV operators like Comcast and YouTube TV, which ostensibly compete with free platforms like Roku and Samsung, especially as consumers look to cut spending as inflation continues to rise. Â
Murdoch downplayed any potential conflict. “We’re partners right now with YouTube, YouTube TV and Comcast, and that doesn’t change,” he said, adding that many distributors are now also content providers. “We look forward to continuing healthy partnership with all our distribution partners.”
“We tend to be skeptical that this deal will generate value for Fox shareholders,” TD Cowen analyst Doug Creutz wrote in a note after the announcement. “The history of content/platform mergers in media has generally not been kind.”
AT&T made a failed bet in 2018 that owning content would boost its phone business when it acquired Time Warner for $85 billion. Three years later, the phone company made a stunning retreat by selling its media prize to Discovery. Fox’s 2019 sale of most of its business to the Walt Disney Company was an effort, in part, to focus on fewer assets at a moment of great disruption.
STREAMING BOOSTÂ
Roku has benefited from consumers leaving traditional TV, while Fox has grappled with cord-cutting. The network giant has accelerated its digital push through launches such as its Fox One subscription service last year. Roku, largely driven by advertising and commissions on sales to subscription services like Netflix or Peacock, has billing relationships with more than 20 million customers. The company also operates the free-to-watch Roku Channel, which will be kept separate from Fox’s ad-supported streaming platform, Tubi.
“A Roku deal would fundamentally pivot the business toward digital and answer long-term concerns about a legacy in PayTV,” J.P. Morgan analyst Cory ​Carpenter wrote in a Friday note in anticipation of a possible deal.
The transaction would make the combined company the third-largest player in TV viewing, behind YouTube and Disney and ahead of Netflix, based on Nielsen figures. Fox has seen strong demand for its live sports content which includes National Football League games, Major League Baseball and the ongoing FIFA World Cup.
Fox is no stranger to Roku. In 2020, it funded its $440 million acquisition of Tubi by selling a 5% stake in Roku that it had held since 2013.
Fox shareholders will own roughly 73% of the combined company after closing, with Roku investors holding the rest.
The boards of both companies have unanimously approved the transaction, which is expected to close in the first half of calendar year 2027 and generate about $400 million in annual cost savings.Â
The deal will include roughly $14.6 billion in cash, with the rest paid in stock, adding about $8.3 billion in debt to Fox’s balance sheet.
Allen & Company is the lead financial adviser to Fox, while Qatalyst Partners is serving as exclusive financial adviser to Roku.Â
(Reporting by Milana Vinn, Dawn Chmielewski, Harshita Mary Varghese and Aditya Soni; Additional reporting by Anhata Rooprai; Editing by Edmund Lee, Devika Syamnath and Daniel Wallis)
By Milana Vinn, Dawn Chmielewski, Harshita Mary Varghese and Aditya Soni | Reuters | © Copyright Thomson Reuters 2026.
