$22 Billion Deal: Fox Acquires Streaming Platform with 100 Million Subscribers

Fox, a media company that provides TV streaming services, is acquiring the Roku streaming platform, which has over 100 million subscribers, Bloomberg reports, noting that the deal will create the third-largest player in the U.S. television market by audience share. Fox expects that combining its sports and news content divisions with Roku’s technology will strengthen the cable-focused media giant’s position amid a massive shift of audiences to online platforms, Reuters notes.

The deal between Fox and Roku will be paid for in cash and stock. It is valued at approximately $22 billion, according to a statement from Fox. The deal calls for a payment of about $14.6 billion in cash, with the remainder to be paid in stock; while Fox’s debt burden will increase by approximately $8.3 billion, Reuters reports. Bloomberg, for its part, notes that to finance the deal, Fox has already received $12 billion in fully guaranteed bridge financing from Morgan Stanley Senior Funding.

As a result, Roku investors will receive $96 in cash and approximately 0.97 shares of Fox Class A stock for each share of Roku they own. Thus, Fox’s offer is valued at $160 per share—33.7% higher than Roku’s closing price on Thursday—the day before Bloomberg reported that Roku was exploring options to sell the business or merge with the American media company.

The boards of directors of both companies have unanimously approved the transaction. The deal is expected to close in the first half of calendar year 2027 and is expected to reduce Fox and Roku’s annual expenses by approximately $400 million through synergies. Upon completion of the transaction, Fox shareholders will own approximately 73% of the combined company, while Roku investors will hold the remaining stake.

Fox shares plummeted nearly 15% during trading on May 15 (Reuters suggests this may be due to investor concerns about dilution of shareholder equity as a result of the deal). Roku shares, on the other hand, initially rose 1.5% to $145.88 apiece, but then lost that gain and, at the time of publication, were down 0.6% at $142.80, which is below Fox’s offer price of $160 per share. On Friday, May 12, when Bloomberg reported on a possible merger between Roku and another American media company, the streaming company’s shares jumped 20%.

The deal will give Fox access to Roku’s base of more than 100 million subscribers. This will help the media company target its advertising more precisely and reduce its reliance on cable broadcasting. Although Fox maintains its leadership in cable networks thanks to sports and the Fox News channel, its own presence in streaming has so far been limited to the free Tubi service (which operates on an ad-supported model)—and this against the backdrop of Americans’ mass shift away from traditional TV, Reuters notes.

“This deal gives Fox more control over content distribution, data, and monetization at a time when TV viewing continues to shift away from traditional channels,” noted Paolo Pescatore, an analyst at PP Foresight. “The combination of premium content, live sports broadcasts, advertising, and platform distribution creates a powerful competitive offering,” he added (quoted by Reuters).

Reuters also notes that this is Fox’s first major acquisition since CEO and Chairman Lachlan Murdoch consolidated control over the media empire built by his father, Rupert, following the resolution of family disputes last year.

Lachlan called the deal with Roku a “defining moment” for Fox, one that “brings together the most valuable portfolio of live content in the video industry with an outstanding streaming platform that reaches all of America.”

This article was AI-translated and verified by a human editor