Media giant to buy streaming platform in $22 billion deal
michelle chapman
Fox Corporation has agreed to acquire streaming pioneer Roku in a cash and stock deal valued at approximately $22 billion, including debt.
The deal will give Fox access to more than 100 million global households, along with the Roku channel and first-party data. Fox operates a massive sports, news and entertainment network alongside Tubi, which it acquired in 2020.
Roku founder Anthony Wood first worked at Netflix in the early 2000s, as the company was trying to make a jarring transition from DVD rentals to streaming.
However, Roku was spun off from Netflix and the company released its first set-top box in 2008.
Wood, who is president and CEO of Roku, said his motivation for pursuing technology was his desire to record and play back his favorite show. Star Trek.
Roku will continue to be operated as an open, partner-friendly platform, the companies said Monday. Fox and Roku said the combined company would be the third-largest player in U.S. television in terms of viewing share.
Fox Corp CEO Lachlan Murdoch said in a statement that combining the businesses will bring Fox’s live news and sports content to a broadcast platform with a broad audience. It will also give Fox greater exposure to advertising and streaming subscriptions.
“The merger with FOX is an extraordinary opportunity to accelerate our vision, scale faster and innovate more aggressively for viewers, partners and advertisers,” Wood said in his prepared remarks.
Wood will continue to serve at the company and will join Fox’s board of directors once the transaction is completed.
Fox will pay $96 in cash and 0.9693 shares of Class A common stock for each Roku Class A and Class B share outstanding. The transaction values $160 per Roku share.
Once the deal is completed, existing Fox shareholders are expected to own approximately 73% of the combined company, while Roku shareholders are expected to own approximately 27%.
The deal is expected to be completed in the first half of next year. It still needs approval from Fox and Roku shareholders, as well as regulators.
Fox’s shares fell before the market opened, while Roku’s shares rose slightly.
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