Fox Corp (NASDAQ:FOXA) has made its biggest swing yet in streaming, agreeing to acquire Roku (NASDAQ:ROKU) in a cash-and-stock deal valued around $25 billion. The offer works out to about $160 per Roku share, split between $96 in cash and 0.9693 Fox Class A shares. Fox expects the deal to close in the first half of 2027, with Fox shareholders owning about 73% of the combined company. This comes after Fox reported a strong fiscal third quarter, with $4 billion in revenue, $954 million in adjusted EBITDA, and continued momentum at Tubi and Fox One. Management framed Roku as a way to gain scale in connected TV, advertising, subscription aggregation, and streaming discovery. The big idea is simple: Fox wants to pair its live news and sports engine with Roku’s massive streaming platform.
Connected TV Scale Could Change Fox’s Reach
Fox already has strong content. Its core strength remains live news, sports, local stations, and free streaming through Tubi. Roku brings a different asset. It sits at the front door of streaming for more than 100 million global households. That matters because viewers now jump between apps, bundles, and free channels every day. Discovery has become a business in itself.
By owning Roku, Fox could get closer to the viewer’s daily streaming behavior. The company would not just supply content. It would also help guide where viewers go. That could support Fox One, Tubi, Fox Sports, Fox News, and local programming. Roku’s home screen, search tools, and personalized recommendations could help Fox surface its content more often, without relying only on cable bundles or third-party platforms.
The deal could also make Fox a larger player in total U.S. TV viewing. Management said the combined company would become the third-largest player in U.S. television by viewing share on a pro forma basis. That gives Fox a bigger seat at the table with advertisers, content partners, and distributors.
Advertising Data & Performance Marketing Could Add Revenue Upside
The most direct synergy may come from advertising. Fox has premium live audiences. Roku has first-party viewing data, performance marketing tools, and a large connected-TV ad footprint. Put together, those pieces could help Fox sell ads with better targeting and measurement.
This is important because connected-TV ad spending keeps moving higher. Fox said nearly 50% of U.S. TV consumption now happens in streaming. It also pointed to CTV ad spend rising as a share of total TV ad spend. That shift plays directly into Roku’s platform model.
Fox could use Roku’s ad technology across Tubi, Fox One, Fox Sports, Fox News, and entertainment content. That may help advertisers reach cord-cutters and lighter TV users more efficiently. It could also make Fox’s inventory more useful for brands that want measurable outcomes, not just broad reach.
Management did not give a formal revenue synergy number. That was a cautious choice. Still, the company repeatedly pointed to advertising upside as a major reason for the transaction.
Tubi & Roku Channel Could Create A Bigger Free Streaming Machine
Tubi and the Roku Channel are both free ad-supported streaming services, but they are not identical. Fox said Tubi is mostly video-on-demand, while Roku Channel leans more toward FAST channels. It also noted only about one-third audience overlap between the two services. That makes the combination more interesting.
Fox does not plan to merge the brands, at least for now. That makes sense. Tubi has its own identity, younger audience appeal, and broad distribution outside Roku. Roku Channel is deeply tied to the Roku platform and benefits from home-screen discovery.
Together, they could give Fox more ad inventory and broader reach. Content buying could also become more efficient. A larger free-streaming footprint may give Fox more leverage with studios, creators, and library owners.
This does not mean every dollar drops to the bottom line. Free streaming still needs content, marketing, technology, and sales investment. But scale matters in AVOD, and Fox could gain more of it here.
Cost Synergies & Balance Sheet Discipline Could Support The Case
Fox expects about $400 million in annual run-rate cost synergies from the Roku deal. That is a meaningful figure. It could come from overlapping technology, corporate costs, marketing, procurement, and content-related efficiencies. Management called the number conservative, though it avoided overcommitting.
The financing plan is also important. Fox expects to fund the cash portion with new debt and cash on hand. Management guided to about 2.8x net leverage at closing, while keeping an investment-grade profile. Fox also said it plans to continue dividends and share buybacks.
That discipline matters because this is a large deal. Fox is not buying a small bolt-on. It is adding a major platform, a major ad business, and a major operating culture. The company believes Roku’s free cash flow can help it delever within a reasonable window.
Still, leverage adds risk. Integration must work. Roku must keep partners comfortable. Fox will need to prove that scale does not come at the cost of platform neutrality.
Final Thoughts
Fox’s Roku deal could give the company a stronger position in streaming, CTV advertising, subscription aggregation, and free ad-supported video. It could also help Fox move beyond being mainly a content supplier. That is the positive side.
The other side is just as real. Roku must remain open and partner-friendly. Large streaming partners may watch Fox’s moves closely. Debt will rise. Integration will take time. The deal also depends on regulatory approvals and a closing expected in H1 2027, so nothing is fully finished yet.
Fox’s valuation gives the deal some context. As of June 15, 2026, Fox traded at 1.61x LTM EV/revenue, 7.36x LTM EV/EBITDA, 8.30x LTM EV/EBIT, 1.35x LTM P/S, and 14.32x LTM P/E. Those multiples look lower than late 2025 on revenue and EBITDA measures, but the stock is not priced as deeply distressed. So the acquisition could be a double-edged sword. It may improve Fox’s growth profile, but it also raises execution, leverage, and partner-neutrality questions.
Disclaimer: We do not hold any positions in the above stock(s). Read our full disclaimer here.
