Fox Corporation has completed its $22 billion acquisition of Roku, transforming the Murdoch family’s company into a major player in the streaming video business.
The deal closed Friday, months ahead of the companies’ original target of the first half of 2027.
The deal combines Fox’s news, sports and broadcast channels with the San Jose-based streaming platform, which reaches 100 million households globally. The $22 billion valuation includes debt.
Roku, founded in 2002, provides Fox with a direct line to consumer households at a time when the traditional pay-TV universe continues its slow decline as viewers move away from cable and satellite services to video streaming. Fox already owns the free ad-supported streaming service Tubi, which turned profitable last year.
Fox Corp. expects to see around $400 million in cost reductions within two years of the Roku acquisition.
While Roku provides Fox with an opportunity to be more aggressive in marketing its channels, Fox has pledged that the platform will remain open to distributing content from competitors.
“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,” Fox Executive Chair and Chief Executive Lachlan Murdoch said in a statement. “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 also serve as co-chair of Fox Digital Platforms, the newly formed division that includes Roku, Tubi, the direct-to-consumer streaming service Fox One and Red Seat Ventures, which provides sales and technical support to podcasters. Paul Cheesbrough, who oversaw Tubi for Fox, will become co-chair and chief executive of the division.
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 around 74% of the outstanding shares of Fox common stock and former Roku stockholders own approximately 26%.
Roku shares stopped trading on the Nasdaq Friday.
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