Fox Outbid Netflix to Buy Roku, So Why Are Both Stocks Falling?

M&A · Partnership
โดย The Motley Fool·Read original
Summary · why it matters

Fox Corp. announced a $22 billion cash-and-stock deal to acquire Roku at $160 per share, a 33.7% premium, but its stock fell 16.8% on the announcement day and has dropped about 25% over two weeks as investors balked at the $12 billion in new debt funding the cash portion. Netflix, which reportedly conducted preliminary due diligence but did not make a formal bid, saw its shares decline amid M&A anxiety over rising acquisition costs and a shift from organic growth. The deal would give Fox access to more than 100 million streaming households and Roku's advertising infrastructure, with management projecting $400 million in annual cost synergies and free cash flow accretion by year two, though the payoff is not expected until 2029. Roku founder Anthony Wood will join Fox's board when the transaction closes in the first half of 2027.

Impact on stocks 3

Communication Services± Mixed · 3 stocks
Fox Corp Class A
FOXA
▼ NegativeCapitalrelevance

Fox announced a $22B cash-and-stock deal to acquire Roku, funded partly by $12B in new debt, causing its stock to fall 16.8% on announcement and ~25% over two weeks as investors balked at the debt.

Roku Inc
ROKU
▲ PositiveCapitalrelevance

Roku is being acquired by Fox at $160 per share, a 33.7% premium, with the deal expected to close in first half of 2027.

Netflix Inc
NFLX
▼ NegativeCompetitionrelevance

Netflix, which conducted preliminary due diligence but did not bid, saw its shares decline amid M&A anxiety over rising acquisition costs and a shift from organic growth.

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