Today Fox Corporation has announced that it’s entered a definitive agreement with Roku to purchase it for $160 per share, of which $96 will be cash and the rest will be Fox shares. This transaction values Roku at $22 billion, but it’s actually unclear how much Fox is paying. For what it’s worth, it says it has obtained $12 billion of fully committed bridge financing from Morgan Stanley for the transaction, so that’s probably the ballpark.
The transaction is expected to close in the first half of next year, after securing all of the necessary regulatory approvals. This acquisition pairs the leader in live news and sports (Fox) with the leading connected TV platform (Roku reaches over 100 million global streaming households, including more than half of all US broadband households).
According to the official press release, “together, Fox and Roku will encompass premium live content, broad distribution and significant audience reach across linear and streaming”. The move positions Fox across the full video ecosystem and gives it an entry into the connected TV segment, while creating a more powerful streaming platform by bringing together Fox’s premium content and advertising capabilities with Roku’s UI, platform technology, and “direct viewer relationships” to “enhance content discovery, deepen engagement and create a more compelling streaming experience for consumers and content partners”.
Fox will continue to operate Roku “as an open, partner-friendly platform”. The combined company will become the third-largest player in US TV by share of viewing.
