Fox Corp. announced Monday that it plans to buy the video streaming giant Roku, along with its namesake channel and customer data, in a deal worth a total of $25 billion.
Fox also owns Tubi, and the acquisition of Roku will make it the third-largest player in U.S. television by share of viewing, as it adds more than 100 million global streaming households, the company said.
According to Nielsen, the Roku Channel commands 3% of all streaming viewership in the United States, putting it in fifth place overall behind YouTube, Netflix, Disney and Amazon’s Prime Video.
Roku will continue to operate as a standalone platform, Fox said in a statement. It remains a primary access point for viewers to open Netflix and YouTube on their TVs.
According to Reuters, Roku’s chief revenue stream is advertising, with $613 million arriving in the first quarter of this year, up 27% year on year.
Adding Roku’s user base is expected to boost Fox’s targeted advertising efforts.
Ahead of Monday’s announcement, multiple media outlets had reported Roku was looking to sell itself.
Fox is borrowing $12 billion to fund the transaction, it said Monday. The final terms of the deal value it at $25 billion overall, according to a filing.
Following the announcement, Fox shares plunged as much as 18% in Monday trading, as some investors worried the 11% premium the company paid on the value of Roku’s shares at Friday’s closing price was too expensive.
