Fox Corp Completes $22 Billion Acquisition of Roku

Fox Corp. said Friday it has closed the acquisition of streaming platform Roku, a deal valued at $22 billion, well ahead of the expected 2027 date.

The transaction makes Fox one of the leading streaming businesses in the U.S., inclusive of Roku, Tubi, and FOX One. The combination of Fox's premium live sports, news and local programming with Roku's open connected TV platform reaching across more than 100 million households creates new opportunities for the company to serve its viewers, advertisers and partners.

Roku's open distribution platform will continue serving more than 100 million households worldwide, with access to thousands of apps and channels across the streaming TV ecosystem. Fox emphasized its pledge that it will preserve Roku as a leading open ecosystem for the broader streaming industry, meaning it will not give exclusive or advantageous positioning to Fox News or the Fox One streaming package on Roku.

"The closing of this acquisition advances the long-term strategy of Fox," Lachlan Murdoch, executive chair and CEO of Fox Corp., said in a statement Friday. "Beginning today, our top priority for the combined company is to continue to relentlessly serve audiences and partners, while reinforcing the openness and choice that is the essence of the Roku platform. Our shared entrepreneurial passion and clear conviction toward building the future together with our new Roku colleagues gives us great confidence in the opportunities ahead of us."

Roku founder Anthony Wood will join the Fox board of directors. He will serve as co-chair, Fox Digital Platforms, a newly formed division that includes Roku, Tubi, Fox One, Red Seat Ventures and other digital products and services across the company, alongside Paul Cheesbrough, who assumes the role of co-chair and CEO of the division.

Wood said in a statement: "We started Roku more than two decades ago to give people a better way to watch TV, and that mission doesn't change today. What does change is our reach and resources. Fox has a deep respect for Roku's culture and wholly shares our commitment to staying open to every content partner. Our teams will keep building and innovating as they always have, now with the support and capabilities of Fox behind us. I'm proud of what Roku's employees have built, and I'm excited about what comes next."

Under the terms of the merger agreement, Roku stockholders are entitled to receive $95.30 in cash and 0.9799 shares of FOX Class A common stock for each share of Roku Class A and Roku Class B common stock they owned immediately prior to closing. As a result of the transaction, Fox stockholders own approximately 74% of the outstanding shares of FOX common stock and former Roku stockholders own approximately 26%. With the acquisition complete, Roku shares will cease trading on the Nasdaq as of today.

Fox Corp. said it expects to achieve approximately $400 million of annualized cost synergies within two years after the Roku deal close. The company also said there is potential revenue upside with the combination of Roku's business and that it anticipates the acquisition will be accretive to free cash flow per share by the second full year after closing.

Allen & Company LLC served as lead financial advisor to Fox. Morgan Stanley & Co. LLC also served as a financial advisor to Fox, and Morgan Stanley Senior Funding, Inc. led the debt financing for the transaction. Goldman Sachs & Co. LLC also served as a financial advisor to Fox. Weil, Gotshal & Manges LLP served as legal counsel to Fox. Qatalyst Partners served as exclusive financial advisor to Roku, and Goodwin Procter LLP and Axinn LLP served as legal counsel to Roku.

Sources

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