Fox to buy Roku for $22B, Netflix shares slide

Fox Corporation agreed to acquire Roku Inc. for $22 billion on Tuesday. The deal pairs Roku’s connected-TV operating system and first-party data from more than 100 million households with Fox’s free ad-supported streaming service, Tubi. Netflix shares fell after the announcement; the stock was trading about 30% below its mid-April year-to-date high.

Roku’s software serves as a discovery and app-delivery platform on millions of smart TVs. Fox said the platform will remain open and partner-friendly. Combined with Tubi, Fox expects a larger distribution footprint that reaches more than half of U.S. broadband households and increases its share of U.S. television viewing.

The companies highlighted the pairing of Tubi’s ad inventory with Roku’s device data and ad technology. Advertisers could gain access to live sports, news and free ad-supported streaming television (FAST) inventory with algorithmic targeting across Roku devices.

The transaction was valued at roughly 24 times Roku’s projected 2027 EBITDA. Reports before the agreement said other tech and media companies including Amazon, Disney and Netflix had considered bidding for Roku. With Fox completing the purchase, competitors lose the opportunity to integrate Roku’s operating system and first-party data into their own ad and distribution strategies.

Wall Street reaction concentrated on implications for ad-supported streaming. Analysts and investors said the combined company would offer a large, data-rich option for advertisers that could affect pricing for premium ad placements and audience acquisition costs for rival platforms.

Market participants will be watching how Fox and Roku allocate advertising slots, surface apps on devices and manage partnerships. The companies have pledged to keep the platform open to partners as they integrate operations and ad infrastructure.