Monday, Fox Corporation (FOX) announced an agreement to acquire Roku, Inc. (ROKU) for $160.00 per share in a cash-and-stock deal, valuing the latter at approximately $22 billion in enterprise value.
As per the terms of the deal, FOX will pay $96.00 in cash and 0.9693 shares of FOX Class A common stock for each Roku Class A and Class B share outstanding immediately before the effective time of the merger.
Following the completion of the transaction, existing FOX shareholders are expected to own approximately 73% of the combined company, while Roku shareholders will hold the remaining 27%.
The merger is expected to create a scaled next-generation media and technology company operating at the intersection of live sports, news, entertainment, and streaming services.
The combined company will bring together FOX's portfolio of sports, news, and entertainment content, along with its Tubi streaming platform, with Roku's connected TV ecosystem, The Roku Channel, first-party data capabilities, and direct access to more than 100 million streaming households globally. FOX said the transaction would create the third-largest television player in the U.S. by share of viewing.
FOX plans to finance the cash portion of the acquisition through a combination of new debt and available cash reserves.
According to the company, the acquisition is expected to strengthen FOX's long-term growth prospects, accelerate its digital transformation strategy, and become accretive to free cash flow per share by the second full year after closing. The deal is also projected to generate approximately $400 million in annualized cost synergies, with additional revenue opportunities.
The transaction is expected to close in the first half of calendar year 2027.
In the pre-market hours, FOXA is trading at $54.00, down 8.35 percent on the Nasdaq.
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