Fox has announced a definitive agreement to acquire streaming device maker Roku for approximately $22 billion in a major media consolidation move.
CNBC reports that Fox has revealed that it will purchase Roku for $160 per share in a combined cash and stock transaction. The acquisition represents a significant consolidation in the media and streaming industry as companies navigate evolving market dynamics and increasing competitive pressures.
To finance the cash component of the deal, Fox plans to use a combination of existing cash reserves and new debt financing. The company has secured a $12 billion loan to support the transaction. Following the announcement, Fox stock declined approximately 15 percent in morning trading.
The acquisition will unite Fox’s portfolio of news and sports networks with Roku’s streaming platform and device business. Fox’s assets include its broadcast network, Fox News Channel, and Tubi, its free ad-supported streaming service. Roku brings its popular streaming devices and The Roku Channel, which operates similarly to Tubi as a free ad-supported platform.
Fox CEO Lachlan Murdoch described the deal as a “defining moment” for the company during a Monday investor call. He noted that Fox was both “an early investor in Roku and a longtime commercial partner,” highlighting the existing relationship between the two companies.
This acquisition marks Fox’s first major deal since 2019, when the company sold its entertainment assets to Disney for $71 billion. Since that divestiture, Fox has focused its business primarily on television channels, including its broadcast network Fox and Fox News Channel on cable. Fox initially entered the streaming market in 2020 by acquiring Tubi for $440 million. That platform served as the company’s primary streaming strategy before the launch of Fox One, a direct-to-consumer streaming service that debuted last year.
During the investor call, Murdoch explained that since 2019, Fox has “reoriented” its business model to center around live news and sports programming while emphasizing advertising revenue growth. This strategic shift reflects broader industry trends as media companies increasingly rely on advertising-supported streaming platforms and live sports content to attract large audiences.
The importance of advertising revenue has grown significantly for media companies as they develop streaming platforms and invest in live sports and events, which continue to generate the largest viewer numbers. Fox indicated Monday that it anticipates approximately $400 million in run-rate cost synergies from the merger, along with additional revenue opportunities.
Under the terms of the agreement, existing Fox shareholders will retain approximately 73 percent ownership of the combined company following the transaction’s completion, while Roku shareholders will own about 27 percent of the merged entity.
Read more at CNBC here.
Lucas Nolan is a reporter for Breitbart News covering issues of AI, free speech, and online censorship.