Fox Corp has agreed to acquire Roku in a cash-and-stock transaction valued at approximately US$22 billion, as it seeks to strengthen its position in the rapidly growing streaming market and capitalise on the continued shift of audiences from traditional television to online platforms.
The deal will provide Fox with direct access to Roku’s extensive reach of more than 100 million streaming households. The acquisition is expected to enhance Fox’s ability to deliver targeted advertising while reducing its dependence on conventional cable and satellite distribution networks.
Under the terms of the agreement, Fox will purchase Roku for US$160 per share, representing an 11.4 per cent premium on Roku’s previous closing price. Following the announcement, Fox shares fell by 8 per cent in pre-market trading, while trading in Roku shares was temporarily halted.
Roku was among the pioneers in bringing streaming services such as Netflix and YouTube to television screens through connected devices and smart TV platforms. The company generates most of its revenue from advertising and subscriptions linked to streaming applications on its platform.
Advertising remains its largest revenue source, contributing US$613 million in the first quarter, a 27 per cent increase compared with the same period last year.
Industry analysts believe the merger could significantly reshape the streaming landscape. Fox already owns the free streaming service Tubi, while Roku operates The Roku Channel.
According to JPMorgan analysts, combining the two platforms could create a dominant force in streaming television with a substantial share of total viewing time.
The companies stated that the merged entity would become the third-largest player in the United States television market by viewing share. The transaction is expected to be completed during the first half of next year.
Upon completion of the deal, existing Fox shareholders are expected to hold approximately 73 per cent of the combined company, while Roku shareholders will own the remaining 27 per cent.
