Fox Completes $22 Billion Roku Acquisition

Fox has finalized its acquisition of streaming platform Roku for $22 billion, a deal that will come to an end on the Nasdaq market starting Friday. This strategic move amplifies Fox's digital ambitions and allows it to expand its programming portfolio, including live sports, news, and local content, onto Roku's expansive connected TV platform, which currently serves over 100 million streaming households. The acquisition bolsters Fox's advertising sector and fortifies its position in the free ad-supported streaming market.

Fox's ownership of Tubi, which commands a monthly active user base of 110 million, will merge with Roku's platform. This combination accounts for 4.8% of streaming viewership in August, tying with Disney's share and lagging behind Netflix and YouTube. When considering linear TV, the unified entity held 8.5% of total TV viewership in August, positioning it as the fourth largest media distributor after YouTube, Skydance, and Disney.

Lachlan Murdoch, CEO of Fox, declared in a statement that the acquisition aligns with the company's long-term strategy. He emphasized that the primary objective moving forward is to serve audiences and partners effectively, while emphasizing the openness and choice inherent in the Roku platform. Murdoch expressed confidence in the opportunities ahead, crediting the shared entrepreneurial spirit between Fox and Roku.

Shareholder approval was obtained in October, and the Department of Justice gave the deal its seal of approval after requesting additional information for its review process. Upon completion, Roku shareholders will receive $95.30 in cash and 0.9799 shares of Fox Class A common stock for each share they held prior to closing. Roku and Fox shareholders collectively hold 74% and 26% of the newly combined company's shares, respectively.

Fox anticipates realizing $400 million in cost savings within the first two years of the merger and expects the deal to positively impact free cash flow per share starting from the second full year following the closing. As part of the agreement, Roku co-founder Anthony Wood will join the Fox board of directors and co-chair the newly established Fox Digital Platforms, which will incorporate Roku, Tubi, Fox One, Red Seat Ventures, and other digital products and services across the conglomerate.

Wood will collaborate with Paul Cheesbrough, who will assume the roles of Fox Digital Platforms Co-Chair and CEO.

Wood stated in a statement that Roku's mission remains unchanged, focusing on providing a superior way to watch TV. However, the merger brings with it enhanced reach and resources, with Fox expressing respect for Roku's culture and shared commitment to remaining open to every content partner. Wood expressed pride in the achievements of Roku's employees and enthusiasm for the future prospects brought about by the merger.