• Fox Corp agrees to buy Roku for $160 per share in a cash-and-stock transaction, valuing the streaming platform at over $23 billion.
  • The deal combines Fox's media content with Roku's streaming technology and ad platform, creating a vertically integrated powerhouse.
  • Shares of Roku surged 28% in premarket trading, while Fox shares slipped 2% on concerns about the acquisition premium.

Fox and Roku Join Forces in Landmark Streaming Merger

Fox Corp has struck a deal to acquire Roku Inc., the streaming device and platform company, for $160 per share in a mix of cash and stock, according to people familiar with the matter. The transaction, expected to close in the first half of next year, represents a premium of roughly 35% over Roku's closing price on Tuesday.

The acquisition marks a bold bet by Fox on the future of ad-supported streaming and connected TV. By combining Fox's vast library of live sports, news, and entertainment with Roku's 80 million active accounts and its leading operating system, the media giant aims to compete more aggressively with tech titans like Amazon and Google.

"This is a natural evolution of our strategy to meet audiences where they are," a Fox spokesperson said in a statement. "Roku's platform and ad tech will accelerate our direct-to-consumer efforts and unlock new opportunities for advertisers."

People close to the negotiations said Fox will fund the cash portion through a combination of debt and existing cash reserves. The stock component will give Roku shareholders a stake in the combined entity, which will retain the Fox brand for its media assets.

Roku's board unanimously approved the deal, according to a regulatory filing. "We believe this combination delivers immediate and substantial value to our stockholders while positioning Roku for its next chapter of growth," said Roku CEO Anthony Wood, who is expected to remain with the company post-merger.

The deal has already drawn scrutiny from antitrust regulators, who are expected to examine whether the merger would stifle competition in the streaming ad market. Fox has expressed confidence that the transaction will clear regulatory hurdles, citing the fragmented nature of the industry.

In after-hours trading Tuesday, Roku shares jumped 28% to $155.50, while Fox shares fell 2% to $34.20, reflecting investor unease over the price tag. Analysts noted that Fox is paying a hefty multiple for a company that has yet to achieve consistent profitability.

"This is a bold move by Fox, but the integration will be complex," said a media analyst at a major investment bank. "The synergy potential is real, but execution risk is high."

Fox's move comes as traditional media companies scramble to adapt to the cord-cutting era. Roku's platform, which also includes a growing advertising business, provides Fox with a direct pipeline to millions of viewers who have abandoned traditional pay TV.

A person close to the deal said negotiations accelerated after Roku's stock slid earlier this year amid a broader tech downturn. Fox's offer represents a lifeline for Roku investors who had grown impatient with the company's path to profitability.

Correction: An earlier version of this article misstated the deal value. The correct value is $23.4 billion based on fully diluted shares.