Fox agrees $22bn Roku takeover to boost streaming, CTV and advertising business
US media giant Fox Corporation is to acquire Roku in a deal that values the streaming platform and technology company at US$22bn.
Fox and Roku said they have entered into a definitive agreement under which Fox will acquire Roku for US$160 per share in a combination of cash and Fox Class A common stock.
The transaction will combine Fox’s sports, news and entertainment content and the Tubi service with Roku’s connected TV platform, The Roku Channel, first-party data and direct relationship with more than 100 million global streaming households.
Roku was one of the first companies to bring Netflix, YouTube and other streamers to conventional television sets through connected devices and smart TVs. It makes its money through advertising and app subscription fees.
Upon closing, existing Fox shareholders are expected to own approximately 73% of the combined company and Roku shareholders approximately 27%. Both boards of directors have given the deal unanimous approval.
Fox expects to fund the cash portion of the transaction consideration with a combination of new debt and cash on hand. It has obtained US$12bn of fully committed bridge financing from Morgan Stanley Senior Funding.
Roku’s connected TV platform is said to reach more than 100 million global streaming households, including more than half of all US broadband households. The companies said they are committed to continuing to operate Roku as an “open, partner-friendly platform and to the continued ubiquitous distribution of Fox content.”
The deal “brings together Fox’s premium content and advertising capabilities with Roku’s consumer interface, home screen, platform technology and direct viewer relationships to enhance content discovery, deepen engagement and create a more compelling streaming experience for consumers and content partners” they said in a statement this morning.
Lachlan Murdoch, executive chair and CEO of Fox Corporation, said: “This is a defining moment for Fox, and a natural extension of the deliberate and focused strategy we have been executing for nearly a decade.
“In 2019, we reoriented the company around live news and sports. In 2020, we acquired Tubi and under our stewardship it has become one of the most successful businesses in streaming. Today, we take the next step: bringing together the most valuable live content portfolio in video consumption with the preeminent streaming platform through which America watches it.
“Roku pioneered streaming TV and scaled it into a leading CTV platform. Together, we intend to lead its next chapter.”
Anthony Wood, founder, chairman and CEO of Roku, will have an ongoing role at the combined company and will join the Fox board following the close of the transaction.
Wood said: “Over the past two decades, we’ve built Roku into the leading TV streaming platform, reaching more than 100 million households globally and reshaping how people discover and enjoy entertainment. I’m incredibly proud of what our team has built, and the combination with Fox is an extraordinary opportunity to accelerate our vision, scale faster and innovate more aggressively for viewers, partners and advertisers.”
The transaction is subject to closing conditions, including approvals by Fox and Roku shareholders and receipt of approvals from US and certain non-US regulatory bodies.
