- Fox Corp. agreed to acquire Roku for roughly $22 billion including debt, combining Tubi and Fox’s media assets with Roku’s 100 million-subscriber streaming platform to create the third-largest US TV player by viewing share.
- Fox will pay $96 in cash plus 0.9693 Fox Class A shares per Roku share; Roku stock slid ~2% while Fox shares tumbled 18% on Monday as the stock component’s implied value shifted.
- The deal targets the fast-growing ad-supported streaming market, where connected TV advertising has grown to 41% of total TV ad spend from 25% in recent years.
- Roku CEO Anthony Wood will stay on and join the Fox board; the deal is expected to close in the first half of 2027, with Fox securing $12 billion in bridge financing from Morgan Stanley.
What Happened?
Fox Corp. announced Monday it will acquire Roku Inc. in a deal valuing the streaming platform at roughly $22 billion including debt. The transaction pairs Fox’s portfolio — which includes the Fox broadcast network, Fox News, and the fast-growing free ad-supported streaming service Tubi — with Roku’s enormous installed base of over 100 million active streaming households. Under the deal terms, Roku shareholders will receive $96 in cash plus 0.9693 Fox Class A shares per share. Fox shares fell sharply on the news, down 18%, while Roku slipped about 2% as the stock component’s value declined with Fox’s share price. Fox secured $12 billion in fully committed bridge financing from Morgan Stanley to fund the acquisition, which is expected to close in the first half of 2027. Roku founder and CEO Anthony Wood will remain with the combined company and join the Fox board.
Why It Matters?
The deal is a direct response to the accelerating shift of TV viewers toward streaming — and specifically toward cheaper, ad-supported tiers. Streaming now accounts for nearly 50% of all US TV viewing, and connected TV advertising has grown to 41% of total TV ad spend. By combining Tubi (which already has nearly 100 million monthly active users and posted 23% revenue growth last quarter) with Roku’s dominant streaming OS and ad tech platform, Fox is positioning itself to compete head-on with Amazon and Netflix for advertising dollars. Roku’s business model — keeping hardware cheap to build an audience it sells to advertisers — is highly complementary to Tubi’s ad-first approach. The combined entity will also benefit from Roku’s leverage over streaming services, which pay the platform for prime home screen real estate and remote control buttons.
What’s Next?
The deal faces regulatory review and is expected to close by mid-2027. Fox has said it plans to keep Tubi and the Roku Channel as separate services rather than merging them, framing the two as complementary rather than redundant. The sharp drop in Fox shares reflects investor concern about the price tag and execution risk — Roku has been under pressure from Amazon’s Fire TV and Google’s competing smart TV platforms. The key test will be whether the combined company can monetize Roku’s massive audience base more effectively than Roku could alone, and whether Fox’s content library gives Tubi a meaningful edge in the intensifying ad-supported streaming wars.
Source: Bloomberg
