Fox Corp just unveiled a $22B deal to acquire connected TV service Roku, considerably boosting its streaming capabilities.

The definitive agreement will see Fox acquire Roku for $160 a share through a combination of cash and Fox Class A stock. This gives Roku an enterprise valuation of $22B. Upon closing, Fox shareholders will own about 73% of the merged business, with Roku shareholders taking the other 27%.

Roku reaches around 100 million global streaming homes through its connected TV platform, and is in more than half of all U.S. broadband households, while Fox has major live news and sports channels, and a rights portfolio including the NFL, MLB, NASCAR, Big Ten and FIFA World Cup.

The deal marks a step-up in streaming for Fox six years after it paid $440 million to acquire Tubi, a free and ad-supported service. In its announcement, Fox said the Roku purchase would “create a scaled next-generation media and technology company positioned at the intersection of two of the most important forces reshaping video consumption: the enduring primacy of live sports and news, and the continued rise of streaming.”

Combined together the likes of the Fox’s sports, news and broadcast networks, Tubi and The Roku Channel, Fox said the merged company would be the third-largest U.S. TV player by viewing share. Fox’s Tubi acquisition helped beef up the company’s holdings following the Murdoch family’s decision to sell most of its assets to Disney for $71.3B.

Around 90% of Tubi’s viewing is AVOD, while Roku is more focused on the adjacent FAST channels space, and Fox sees them as complementary businesses.

In a statement announcing the deal, Fox and Roku said both companies were “committed to continuing to operate Roku as an open, partner-friendly platform and to the continued ubiquitous distribution of Fox content.” Directors from both sides have “unanimously” approved the deal, which they expect to “be accretive to free cash flow per share by the second full year after closing” and achieve around $400M in run-rate cost synergies.

“This is a defining moment for Fox, and a natural extension of the deliberate and focused strategy we have been executing for nearly a decade,” Fox CEO Lachlan Murdoch said in a statement. “In 2019, we reoriented the company around live news and sports. In 2020, we acquired Tubi and under our stewardship it has become one of the most successful businesses in streaming.

“Today, we take the next step: bringing together the most valuable live content portfolio in video consumption with the preeminent streaming platform through which America watches it. This combination will transform the scope of our company into high-growth verticals and yield a step change in our overall growth profile.”

He talked up Fox’s financial position for the deal and said Roku “pioneered streaming TV and scaled it into a leading CTV platform. Together, we intend to lead its next chapter.”

Roku founder, chairman and CEO Anthony Wood will have “an ongoing role” at the combined company and will join the Fox board.

“Over the past two decades, we’ve built Roku into the leading TV streaming platform, reaching more than 100 million households globally and reshaping how people discover and enjoy entertainment,” Wood said.

“I’m incredibly proud of what our team has built, and the combination with Fox is an extraordinary opportunity to accelerate our vision, scale faster and innovate more aggressively for viewers, partners and advertisers. That’s why our Board of Directors unanimously determined after concluding its strategic review process that this transaction offers a significant premium to Roku shareholders while also providing them with the opportunity to participate in the compelling future upside of the combined company. I couldn’t be more excited about what we’ll accomplish together.”

The deal is subject to customary closing conditions, approvals from both sets of shareholders and U.S. and foreign regulatory approvals. The deal is expected to close in the first half of 2027.