Fox's $22B Roku buy merges Tubi and The Roku Channel, creating a TV powerhouse. Fox shares fell 13% on the price; Roku rose 2%. Regulators will weigh antitrust concerns.
Fox Corp. agreed to buy Roku for roughly $22 billion, or $160 a share, pulling together two ad-supported streaming platforms in a deal that reshapes the living room.
The transaction, announced Monday, sends Fox shares down 13% in premarket trading. Roku shares rose 2%. The $22 billion price tag values Roku at a premium over its recent trading level, reflecting the strategic value of the streaming-device maker's installed base.
Fox brings Tubi, the free ad-supported service it bought for $440 million in 2020, alongside sports and news from the Fox broadcast network and Fox News Channel. Roku sells the hardware that millions of households use to watch streaming content and operates The Roku Channel, a direct competitor to Tubi. Combining the two gives Fox a direct-to-consumer distribution channel that bypasses cable operators and other middlemen.
That is a different path from the one Fox took after its last big deal. In 2019, it sold its film studios and cable networks to Disney for $71 billion, keeping the broadcast network, Fox News, and the sports rights that now anchor its streaming push. The Roku acquisition is the first major move under that stripped-down structure.
The merger forces other streaming hardware makers to reassess their positions. Amazon's Fire TV, Google's Chromecast with Google TV, and Apple's TV hardware all compete for the same shelf space Roku owns. If Fox steers users toward Fox content on Roku devices, rivals may need to strike similar content deals or risk losing share in the fast-growing free ad-supported TV segment, known as FAST.
Content suppliers also face new dynamics. The combined entity will command more bargaining power with programmers who want placement on Roku's home screen. That could shift negotiation leverage away from companies like Disney, Warner Bros. Discovery, and NBCUniversal, which rely on Roku's platform to reach cord-cutters.
The deal still needs antitrust clearance. Regulators may examine whether Fox would gain the ability to favor its own channels over competitors in Roku's interface. Fox said it expects the transaction to close in the second half of this year.
For Fox, the acquisition ends a period of relative quiet in dealmaking. The company had focused on live sports and news rights rather than distribution. Now it owns both.
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