Fox Closes $22 Billion Roku Takeover, Says Streaming Platform Will Remain ‘Open Ecosystem’

Surprise! Fox Corp. said Friday it has closed the acquisition of streaming platform Roku, a deal valued at $22 billion, well ahead of the expected 2027 date. Roku founder and CEO Anthony Wood will join the Fox board of directors. He will serve as co-chair, Fox Digital Platforms, a newly formed division that includes Roku, Tubi, Fox One, Red Seat Ventures and other digital products and services across the company, alongside Paul Cheesbrough, who assumes the role of co-chair and CEO of the division. “The closing of this acquisition advances the long-term strategy of Fox,” Lachlan Murdoch, executive chair and CEO of Fox Corp., said in a statement Friday. Fox Corp. emphasized its pledge that it will preserve Roku “as a leading open ecosystem for the broader streaming industry.” That means that, say, it won’t give exclusive or advantageous positioning to Fox News or the Fox One streaming package on Roku, which has a customer base of more than 100 million households. The Roku deal will dramatically beef up Fox’s streaming footprint and give it the opportunity to increase scale in the free, ad-supported streaming space through Fox’s Tubi and the Roku Channel. With Roku, Fox overnight is now a much bigger player in digital video advertising as well as key distributor of premium subscription streaming services. “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,” Murdoch said. “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.” Fox Corp. said it expects to achieve approximately $400 million of annualized cost synergies within two years after the Roku deal close, suggesting layoffs are in the offing. Fox also said there’s potential revenue upside with the combination of Roku’s business and that it anticipates that the acquisition will be accretive to free cash flow per share by the second full year after closing. Wood said in a statement: “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. 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.” In June, Fox announced the agreement to buy Roku for $160/share in a combination of about $14.2 billion in cash and the remainder in Fox Class A common stock. Shareholders of both companies approved the deal on Oct. 14.