Roku shares fall as Fox strikes $22 billion deal to acquire streaming platform

Shares of Roku, the popular streaming TV platform, fell 2.5% to $139.80 apiece on Monday, 15 June, after Fox Corp announced that it would acquire the company in a deal that values the streaming video platform at approximately $22 billion.

Including debt, the transaction will create a television and streaming giant with control over both content and distribution, enabling it to better compete with major streaming platforms in the advertising market.

The deal, which comes after Roku spent the past several months working with investment bankers to explore strategic alternatives, will combine Fox's portfolio of sports, news, and entertainment channels — including the free ad-supported streaming service Tubi — with Roku's platform of more than 100 million subscribers, the companies said in a joint statement on Monday.

According to the statement, the acquisition will create the third-largest player in the US television market by share of viewing, with distribution spanning broadcast, cable, local television, and streaming platforms.

The transaction also marks Fox's largest acquisition to date. In 2021, the company acquired Tubi, the free ad-supported streaming service, for $400 million.

Combining Tubi with Roku will create a major force in the free ad-supported streaming market at a time when consumers are increasingly shifting toward on-demand viewing, according to a Bloomberg report.

In addition to distributing third-party streaming services through connected TVs and devices, Roku operates its own ad-supported Roku Channel. With the acquisition, the combined company is expected to compete more effectively with industry giants such as Amazon and Netflix for advertising revenue, according to The Wall Street Journal.

Ad-supported streaming plans now account for nearly 50% of all premium subscription video-on-demand sign-ups in the US, up from 39% just two years ago, the report said, citing data from research firm Antenna.

Under the terms of the agreement, Fox will pay $96 in cash and 0.9693 Fox Class A shares for each Roku share, according to Bloomberg. The stock component represents approximately $64 per Roku share based on the 10-day volume-weighted average price of Fox common stock as of 10 June.

Roku generates the majority of its revenue from digital advertising and the distribution of streaming services, with device sales contributing a significantly smaller share. Its platform segment generated $4.1 billion, or 87.5%, of total revenue last year, slightly higher than the previous year.

Fox and Roku expect the cash-and-stock transaction to close in the first half of 2027. Upon completion, Fox shareholders will own approximately 73% of the combined company, while Roku shareholders will own the remaining stake. Fox plans to fund the cash portion of the acquisition through $12 billion in new debt, along with existing cash reserves.

Roku shares recover sharply from 2025 lows

Roku stock has maintained a strong upward trend over the past year, climbing to multi-month highs as it attempts to recover a portion of its earlier losses. From its April 2025 low of $52.40, the stock has surged 184%, based on Friday's closing price of $144.

Despite the sharp recovery, the stock still trades about 66% below its record high of $491, which it reached in July 2021. Following that peak, Roku remained locked in a prolonged bearish trend for more than a year, during which it lost nearly 90% of its value. Along the way, the stock slipped below the $40 mark in December 2022.

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