Fox Corporation (FOXA, FOX) made a splash on Monday, agreeing to buy Roku Inc. (ROKU) in a cash-and-stock deal worth about $22 billion. The move is a big bet on streaming, combining Fox's sports, news, and entertainment lineup with Roku's platform that reaches over 100 million streaming households globally. But investors weren't thrilled—Fox shares tumbled nearly 10% in premarket trading.
The deal is structured as $160 per Roku share, with $96 in cash and 0.9693 shares of Fox Class A common stock for each Roku share. Roku's founder, chairman, and CEO, Anthony Wood, will stick around and is expected to join Fox's board after the transaction closes, which is slated for the first half of 2027.
Fox is betting that combining its premium live content—think NFL, MLB, NASCAR, Big Ten, and FIFA World Cup rights, plus FOX News and FOX Business—with Roku's connected TV platform and first-party data will create a powerhouse in streaming and connected TV advertising. The companies say Roku will keep operating as an open, partner-friendly platform, and Fox content will stay broadly distributed.
On a pro forma basis, the merged company would become the third-largest player in U.S. television by share of viewing. Fox highlighted Roku's reach across more than half of U.S. broadband households as a key asset. The acquisition is also expected to strengthen Fox's position in connected TV advertising, streaming subscriptions, and other high-growth digital segments.
Financially, Fox expects the deal to be accretive to free cash flow per share by the second full year after closing and to generate roughly $400 million in annualized cost synergies, with potential additional revenue opportunities. Fox reported $3.601 billion in cash and cash equivalents as of March 31, 2026. After the deal closes, existing Fox shareholders are expected to own about 73% of the combined company, while Roku shareholders will own about 27%.
Roku itself has been on a roll. It reported first-quarter revenue of $1.248 billion, up 22% year-over-year, and guided second-quarter revenue to $1.295 billion, above the $1.285 billion Street view. The company also raised its full-year revenue outlook to $5.535 billion, with Platform revenue at $5.0 billion and Devices revenue at $535 million.
Still, the market's reaction suggests some skepticism. Fox shares were down 9.49% at $53.33 during premarket trading on Monday. Whether this deal pays off will depend on how well Fox can integrate Roku's platform and audience while navigating the competitive streaming landscape.
