Fox has completed its $22 billion acquisition of Roku, which will cease trading on the Nasdaq starting Friday.
The deal accelerates the media giant’s digital strategy and expands its business by bringing its live sports, news and local programming to Roku’s open connected TV platform reaching more than 100 million streaming households. It also supercharges Fox’s advertising business and cements its dominance in the free ad-supported streaming space. Fox already owns Tubi, which reaches a total of 110 million monthly active users.
Together, Tubi and Roku accounted for 4.8% streaming viewership in August — tying with Disney’s streaming share and trailing behind Netflix and YouTube, per Nielsen. When including linear TV, the combined company accounted for 8.5% of total TV viewership for the month, making it the fourth largest media distributor behind YouTube, Skydance and Disney.
“The closing of this acquisition advances the long-term strategy of FOX. 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 CEO 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.”
The closing comes after the deal secured shareholder approval in October. It also comes as the Department of Justice cleared the deal after issuing a “second request” for additional information as part of its review.
Under the terms of the merger, 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. Former Roku shareholders own approximately 26% of Fox’s outstanding shares, while Fox’s shareholders own the remaining 74%.
Fox expects $400 million in cost savings within the first two years of the deal. It will be accretive to free cash flow per share by the second full year after closing.
As part of the deal, Roku founder Anthony Wood will join the Fox board of directors and serve as co-chair of Fox Digital Platforms, a new division that includes Roku, Tubi, Fox One, Red Seat Ventures and other digital products and services across the company. Wood will lead the division alongside Paul Cheesbrough, who assumes the role of Fox Digital Platforms Co-Chair and CEO.
“We started Roku more than two decades ago to give people a better way to watch TV, and that mission doesn’t change today. What does change is our reach and resources. FOX has a deep respect for Roku’s culture and wholly shares our commitment to staying open to every content partner,” Wood said in a statement. “Our teams will keep building and innovating as they always have, now with the support and capabilities of FOX behind us. I’m proud of what Roku’s employees have built, and I’m excited about what comes next.”
