TLDR
- FOX drops 15.60% as $22B Roku deal pressures market sentiment.
- FOX plans $22B Roku purchase using cash, stock, and new debt.
- Roku deal gives FOX wider reach across streaming and connected TV.
- FOX secures $12B bridge financing to support Roku acquisition.
- FOX expects Roku merger to close in the first half of 2027.
Fox Corporation (FOX) shares fell sharply after the company announced a $22 billion agreement to acquire Roku. FOX dropped 15.60% to $49.73, after sliding from above $58 earlier in the session. The move showed market pressure around the deal’s size, funding plan, and long closing timeline.
FOX Moves to Expand Streaming Reach With Roku Deal
Fox Corporation said it will acquire Roku for $160 per share through cash and stock. The offer includes $96 in cash and 0.9693 FOX Class A shares for each Roku share. The stock portion uses a $66.03 reference price based on FOXA’s 10-day average.
The agreement values Roku at about $22 billion in enterprise value. FOX said the transaction brings together its sports, news, entertainment, and Tubi assets with Roku’s streaming platform. As a result, the combined business gains wider reach across broadcast, cable, local, and streaming markets.
Roku brings more than 100 million global streaming households to the proposed company. It also adds The Roku Channel, platform technology, first-party data, and direct viewer relationships. Meanwhile, FOX adds live sports, news, and entertainment brands with broad advertiser demand.
FOX Shares Fall as Deal Raises Debt and Integration Questions
FOX shares faced heavy selling after the announcement, and the stock stabilized near $49.50 in afternoon trading. The fall reflected concern over the acquisition’s cost, structure, and execution demands. However, FOX said it will maintain its shareholder return program after the deal.
FOX expects to fund the cash portion with new debt and cash on hand. The company secured $12 billion in bridge financing from Morgan Stanley Senior Funding. After closing, FOX expects pro forma net leverage of about 2.8 times.
The companies expect about $400 million in run-rate cost synergies from the combination. FOX also expects the deal to increase free cash flow per share by the second full year. Still, the transaction depends on regulatory approvals and shareholder votes before completion.
Roku Adds Scale as FOX Targets Connected TV Growth
The deal gives FOX a larger position in connected TV advertising and streaming distribution. Roku operates one of the largest connected TV platforms in the market. FOX gains deeper access to viewers as more households shift toward streaming.
FOX said Roku will continue operating as an open and partner-friendly platform. The company also said FOX content will remain broadly distributed after the merger. That approach may help reduce concerns among partners that use Roku’s platform.
Roku founder and Chief Executive Anthony Wood will keep a role in the combined company. He will also join the FOX board after the transaction closes. The companies expect the deal to close in the first half of 2027.
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