Investing.com -- Fox Corp. has agreed to acquire streaming pioneer Roku Inc. in a cash-and-stock transaction valued at approximately $22 billion in enterprise value, a bold bet that marries the dominant force in live television with the largest gatekeeper of American connected TV.

Under the terms of the agreement, Fox will pay $160.00 per share for Roku—consisting of $96.00 in cash and 0.9693 shares of Fox Class A common stock for each share of Roku. The purchase price represents a significant premium for Roku shareholders, whose company had been undergoing a strategic review.

The deal creates a massive distribution powerhouse at a time when the traditional media landscape is splintering. By combining Fox’s premium live sports and news portfolio with Roku’s platform—which reaches more than 100 million global households—the combined company will jump to become the third-largest player in U.S. television by share of total viewing time.

For Fox the acquisition accelerates a long-term pivot toward digital growth. Following the 2019 sale of its entertainment assets to Walt Disney Co., Fox deliberately focused on "appointment viewing" content like the NFL, Major League Baseball, and Fox News. While that strategy insulated the company from the worst of the cord-cutting era, it left Fox heavily reliant on traditional cable and broadcast packages.

Buying Roku gives Fox direct control over the home screens of more than half of all broadband households in the United States. It also merges two highly successful free, ad-supported streaming television services: Fox’s Tubi and The Roku Channel.

"This is a defining moment for FOX," Lachlan K. Murdoch, Executive Chair and Chief Executive Officer of Fox, said in a statement. He noted that the transaction combines "the most valuable live content portfolio in video consumption with the preeminent streaming platform through which America watches it."

Anthony Wood, the founder and CEO of Roku who pioneered the streaming-stick hardware category before pivoting into advertising and software, will join Fox’s board of directors and retain an ongoing role in the combined entity.

"The combination with FOX is an extraordinary opportunity to accelerate our vision, scale faster and innovate more aggressively," Mr. Wood said.

To fund the cash portion of the transaction, Fox has secured $12.0 billion in fully committed bridge financing from Morgan Stanley Senior Funding, Inc., and will deploy cash on hand.

Wall Street will likely scrutinize the company’s leverage. Fox stated that at closing, its pro forma net leverage will sit at approximately 2.8 times core earnings, a figure that includes half of the projected $400 million in run-rate cost synergies. Fox emphasized that its shareholder capital return program—consisting of dividends and stock buybacks—will continue "uninterrupted," and it expects to maintain its current investment-grade credit rating.

Upon completion of the merger, existing Fox shareholders will own roughly 73% of the combined company, with Roku shareholders holding the remaining 27%.

The transaction has been unanimously approved by the boards of both companies. Because Mr. Wood and his associated trusts hold a majority of Roku’s voting power, shareholder approval on the Roku side is effectively locked up through a support agreement.

However, the deal is bound to attract regulatory scrutiny in Washington, where antitrust regulators have closely watched vertical integrations in the media and tech space.

Anticipating potential concerns from independent streaming apps that rely on Roku to reach consumers—such as Netflix, Disney+, and Warner Bros. Discovery’s Max—both companies explicitly committed to operating Roku as an "open, partner-friendly platform."

The deal is expected to close in the first half of 2027, subject to regulatory clearances and Fox shareholder approval.

Shares of Fox declined 15% following the announcement.