Roku (ROKU) M&A announcement summary

Deal rationale and strategic fit

• Combines a leader in live news and sports with a top connected TV platform, expanding reach and engagement across over 100 million households and unlocking new ways to serve audiences and partners.

• Positions the combined entity as the third-largest U.S. TV player by share of viewing, spanning broadcast, cable, local, and streaming, and advances business mix toward high-growth streaming and CTV.

• Accelerates advertising capabilities and cross-promotion opportunities, leveraging premium content, advanced targeting, and first-party data.

• Both companies share a culture of innovation and entrepreneurial mindset, expected to drive efficient integration and future growth.

• The deal is seen as a transformational step, accelerating long-term strategy and enhancing the ability to compete in a rapidly evolving streaming and advertising landscape.

Financial terms and conditions

• Acquisition valued at $160 per share, with 60% in cash and 40% in Fox Class A common stock, totaling $25 billion equity value and $22 billion enterprise value.

• Each Roku share receives $96 in cash and 0.9693 Fox Class A shares, with 152 million new shares to be issued.

• Fox shareholders will own about 73% and Roku shareholders about 27% of the combined company post-closing.

• Cash funded by $8 billion in new debt, $9 billion in pro forma combined cash at close, and $12 billion in committed bridge financing.

• Pro forma net leverage expected to be 2.8x trailing 12-month EBITDA at closing, with rapid de-leveraging anticipated.

Synergies and expected cost savings

• Approximately $400 million in run-rate cost synergies identified, with additional revenue upside expected.

• Revenue synergies anticipated from enhanced advertising capabilities, cross-promotion, and leveraging first-party data, though not yet quantified.

• Combined digital platforms projected to generate about 30% of total revenue on a pro forma basis.

• Transaction expected to be accretive to free cash flow per share by the second full year after closing.