"Fox Corporation announced on Monday a definitive agreement to acquire video streaming company Roku in a transaction valued at $22 billion, or $160 per share."
The Deal
The deal, structured as a cash-and-stock combination, has been approved by the boards of directors of both companies and is expected to close in the first half of 2025.
Bidding Process
According to a report from news site Semafor on Tuesday, Netflix also pursued the acquisition of Roku. Unnamed sources indicated that Netflix’s offer was lower than the $160 per share offered by Fox Corp.
The report also stated that regulatory hurdles and Fox's commitment to maintaining Roku as an "open, partner-friendly platform" were factors in the decision. Netflix has not commented on the Semafor report.
Market Reaction
Netflix shares fell approximately 3.5 to 4 percent on Tuesday following the reports. Analysts cited by multiple sources suggested that owning Roku could have provided Netflix a complementary asset, but that regulatory approval might have been more challenging for Netflix due to its existing market position in video streaming.
Background
Roku founder Anthony Wood originally developed the Roku hardware at Netflix in the early 2000s. Netflix spun off the hardware division in 2008.
This is the second reported major failed acquisition for Netflix. In a previous instance, the company unsuccessfully attempted to acquire Warner Bros. Discovery. Co-CEO Ted Sarandos stated that the Warner Bros. pursuit helped Netflix build its mergers and acquisitions capabilities, including deal execution and early integration.
Related Reports
Semafor also reported that Netflix is among media companies evaluating a potential acquisition of Lionsgate Studios. However, Netflix denied that it has submitted any formal indication of interest.