Fox Corp’s $22bn Acquisition of Roku
By Mustafa Arda Sis, Carl Fuertes-Nitura, Scarlett Weststrate, Sean Chinyanda, Shaun Gichuhi (University of Nottingham); Rakan Aqrouq, Scarlet Park, Adrian Nicholas Hasjim, Daisuke Kijima (University of British Columbia)
Photo: Grigorii Shcheglov (Unsplash)
Overview of the deal
Acquirer: Fox Corporation (Nasdaq: FOXA)
Target: Roku, Inc (Nasdaq: ROKU)
Implied Equity Value: ~$25bn ($160 per share)
Total Transaction Size: ~$22bn (enterprise value)
Announced date: 15/06/2026
Closed date: 06/11/2026
Target advisor: Qatalyst Partners (financial), Goodwin Procter LLP (legal)
Acquirer advisor: Allen & Company (lead financial), Morgan Stanley, Goldman Sachs (financial), Weil, Gotshal & Manges LLP (legal)
On 15 June 2026, Fox Corporation announced a definitive agreement to acquire Roku in a cash and stock transaction, valuing the business at approximately $22bn enterprise value. Roku shareholders will receive $96 in cash and 0.9693 shares of FOX Class A stock per Roku share, equivalent to around $160 per share. The transaction represents Fox Corporation’s largest acquisition to date.
Strategically, the deal hopes to accelerate Fox Corporation’s transition towards high-growth streaming and high-margin advertising. Fox will have greater control over the distribution and discovery of its diversified portfolio of live sports, news and entertainment content. Roku's extensive platform will provide Fox with access to over 100 million global streaming households through its operating system, home screen and first-party consumer data. The combined business is expected to become the third-largest US television competitor by share of viewing. Additional revenue opportunities, from integrating Roku's platform and The Roku Channel with FOX's existing Tubi service enhance its position to increase monetisation and viewer engagement. Furthermore, approximately $400m in annual run-rate cost synergies are estimated, primarily through operational and overhead efficiencies.
Interestingly, Fox Corporation previously held an early minority stake in Roku, which it sold in March 2020 for approximately $340m to help finance its $440m acquisition of Tubi. Returning to acquire the entire platform demonstrates Fox's conviction in Roku's technology and the long-term growth potential of streaming advertising.
Company Details (Acquirer - Fox Corporation)
Fox Corporation, established as an independent publicly traded company on 19 March 2019, is an American media conglomerate operating across news, television broadcasting, sports and digital streaming. The company operates through two primary segments: Cable Network Programming and Television. Its Cable Network Programming segment produces and distributes news and sports content across cable, satellite and digital platforms, whilst its Television segment focuses on broadcasting, content production and distribution through the FOX network, television stations and its ad-supported streaming service, Tubi.
Founded: 19th March 2019
Headquartered: New York, USA
CEO: Lachlan K. Murdoch
Number of employees: 10,550
Market Cap: $26.8bn (as of 05/11/2026)
EV: $28.92bn
LTM Revenue: $17.96bn
LTM Adjusted EBITDA: $4.48bn
LTM EV/Revenue: 1.6x
LTM Adjusted EV/EBITDA: 6.5x
*Note: Financial valuations are based on closing share prices as of 5 November 2026, prior to completion of the transaction.
Recent Transactions: Undisclosed acquisition of Supercast (Feb 2026); Undisclosed acquisition of Meet Cute (Nov 2025); Undisclosed acquisition of Caliente TV (Jun 2025)
Company Details (Target - Roku)
Roku is a US-based streaming technology company and the leading TV streaming platform in North America, with more than 100 million streaming households globally. It generates most of its revenue through its platform business, mainly advertising and subscription distribution, and also runs its own free, ad-supported service, The Roku Channel. Additionally, its operating system powers Roku’s own devices and partner smart TVs. Today, the company is focused on growing its advertising business as more viewers move from traditional TV to streaming.
Founded: 2002
Headquartered: San Jose, California
CEO: Anthony Wood
Number of employees: ~3,600
Market Cap: ~$17.6B (as of 11/06/2026)
EV: ~$15.3B
LTM Revenue: ~$4.97B
LTM Adjusted EBITDA: ~$513M
LTM EV/Revenue: ~3.1x
LTM EV/EBITDA: ~29.8x
Projections and Assumptions
Short-Term Consequences
Fox’s $160 per share acquisition closed on 6 November 2026 after DOJ clearance. Former Roku shareholders now own around 26% of Fox. Investor reaction was largely negative, with Fox shares falling over 15% on announcement day, despite the Nasdaq rising over 2%. This largely reflects the dilution involved, with Fox issuing around 152 million new shares to fund 40% of the purchase price, while the remainder is being funded in cash, partly through $8.3bn of new debt. A larger share count, higher interest costs and amortisation of acquired intangibles are likely to dilute EPS over the next year, which may explain why Fox guided on free cash flow per share rather than EPS.
Roku now sits in a new FOX Digital Platforms division alongside Tubi and FOX One, remaining an open platform, so its product offering should not change in the near term. Fox gains access to over 100 million households and a stronger position in Canada and Mexico, where Roku is the leading TV streaming platform. Owning the platform also gives Fox some of the control Apple has through Apple TV, such as prominent placement for its content and cross-selling advertising across markets, though these revenue synergies are unlikely to occur for at least one year. No job cuts have been announced, but the $400m cost synergy target points to overlap in advertising sales and streaming operations, creating uncertainty for employees.
Long-Term Upsides
In the longer term, the deal should improve Fox's financial profile despite the initial EPS dilution. Fox expects the acquisition to be accretive to free cash flow per share by the second full year after closing, supported by around $400m in run-rate cost synergies. Combined with Roku's cash generation, this should allow Fox to bring net leverage down from around 2.8x at closing while keeping its mid-BBB investment grade rating and continuing its share buyback programme.
The acquisition also gives Fox greater exposure to a faster-growing advertising market. US connected TV (CTV) ad spend is forecast to reach $46.89bn by 2028, overtaking traditional TV advertising for the first time. Roku is already seeing growth in this market, with advertising revenue increasing by 27% and subscription revenue by 30% year-on-year in Q1 2026. This contrasts with Fox's more established linear television business.
The bigger opportunity lies in revenue synergies once integration is complete. Access to Roku's first-party data across more than 100 million households could allow Fox to target advertising around its live sports and news content more effectively, potentially allowing it to charge advertisers higher rates. As Tubi and The Roku Channel share only around a third of their audiences, keeping both platforms while cross-promoting FOX content on the Roku home screen gives Fox wider reach rather than overlap. Roku's presence in more than 15 countries could also help Fox expand the international reach of its content over time.
Risks and Uncertainties
Regulatory approval remains one of the main risks facing the acquisition. In September 2026, the U.S. Department of Justice (DOJ) issued a Second Request for additional information, extending the antitrust review process. Combining Fox's media portfolio with Roku's streaming distribution platform raises concerns over vertical integration, particularly the potential preferential treatment of Fox-owned services such as Tubi. If the review takes longer than expected, closing could be delayed beyond the first half of 2027. The DOJ could also require certain assets to be sold, potentially weakening the strategic benefits of the acquisition.
Political developments introduce further uncertainty following the Democrats' victory in the November 2026 midterm elections. Given Fox News' predominantly conservative audience, the transaction could attract additional congressional scrutiny over media consolidation, although the direct implications for regulatory approval remain unclear.
Financial risks are also significant, with Fox expecting pro forma net leverage of approximately 2.8x at closing. The prevailing interest rate environment presents additional uncertainty, with Goldman Sachs and J.P. Morgan forecasting a further 25-basis-point Federal Reserve rate hike in December 2026. Elevated borrowing costs could increase debt servicing expenses, particularly as Fox secures permanent financing, while weaker-than-expected cash flows could constrain financial flexibility.
There are also operational challenges, particularly given Roku's existing relationships with competing streaming providers. Any perceived preferential treatment of Fox-owned content could weaken these partnerships and undermine Roku's position as a neutral distribution platform, potentially limiting advertising revenue growth and the realization of Fox's targeted $400 million in annual run-rate cost synergies.
“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.” - Lachlan K. Murdoch, Chief Executive Officer (Fox Corporation)