Fox Corporation has agreed to buy streaming pioneer Roku in a cash-and-stock deal worth around $US22 billion ($31 billion), including debt.

The deal gives Fox access to more than 100 million global households, plus Roku's ad platform and first-party data. Fox already owns Tubi (bought in 2020), plus a huge sports, news and entertainment network.

Roku founder Anthony Wood started working on the tech while at Netflix in the early 2000s, when Netflix was shifting from DVDs to streaming. Roku was spun off, and its first set-top box hit shelves in 2008. Wood says his motivation was wanting to record and play episodes of Star Trek.

The companies say Roku will keep running as an open, partner-friendly platform. Combined, Fox and Roku will become the third-largest player in US television by share of viewing.

Fox CEO Lachlan Murdoch said the merger brings together Fox's live news and sports with a streaming platform that already has a huge audience. It also gives Fox more ad exposure and subscription revenue.

“Consumers are gravitating toward simpler, more unified experiences on their favourite platforms like Roku,” Murdoch said. “Advertisers are reaching similar conclusions, seeking large audiences, improved digital targeting and more consistent measurement across platforms.”

Wood called the deal “an extraordinary opportunity to accelerate our vision, scale faster and innovate more aggressively.” He'll stay on and join the Fox board after the deal closes.

Here's the money part: Fox pays $US96 ($136) cash plus 0.9693 shares of its Class A common stock for each Roku share. That values each Roku share at $US160 ($226).

But markets aren't thrilled. Fox shares tumbled 18% on Monday, while Roku shares slipped about 1.9% to $US140.95 ($198.93). If Fox's stock stays down, the stock component of the deal becomes worth less.

Existing Fox shareholders will own about 73% of the combined company; Roku shareholders get roughly 27%. The deal still needs approval from both sets of shareholders and regulators. It's expected to close in the first half of 2027.

Roku's devices changed home entertainment by letting people stream Netflix, HBO Max and other apps on any TV — basically turning dumb tellies into smart ones. The company also sells branded TVs and projectors, but most of its money comes from digital ads and distributing streaming services. Hardware sales are a small slice.

Last year, Roku's platform segment pulled in $US4.1 billion ($5.8 billion) — 87.5% of total revenue. The strategy is to keep hardware cheap to hook users, then sell their viewing data to advertisers. That's where the growth is.