NEW YORK CITY, New York: Fox Corp is making its biggest move yet into streaming, agreeing to acquire Roku in a cash-and-stock deal valued at about $22 billion as it seeks to strengthen its digital advertising business and expand the reach of its sports and news content.

The deal, announced June 15, would give Fox access to more than 100 million households that use Roku's streaming platform, helping the media company deepen its presence in online video while reducing its dependence on traditional cable television distribution.

It marks Fox's first major acquisition since CEO and Chairman Lachlan Murdoch consolidated control of the company following a family settlement last year.

Murdoch described the transaction as a "defining moment" for Fox that brings "together the most valuable live content portfolio in video consumption with the preeminent streaming platform through which America watches it."

Investors reacted cautiously to the announcement. Fox shares fell nearly 17% in early trading, while Roku shares slipped 2.5% to $140.10, remaining below the offer price of $160 per share.

Roku was one of the pioneers in bringing streaming services such as Netflix and YouTube to television screens through connected devices and smart TVs. Its business generates revenue primarily from advertising and subscriptions on its platform.

The company also operates the Roku Channel, a free ad-supported streaming service that will remain separate from Fox's Tubi platform.

Roku founder and CEO Anthony Wood said the company's operating system helps keep hardware costs low, giving it an advantage as memory prices rise.

Under the terms of the agreement, Roku shareholders will receive $96 in cash and approximately 0.97 Fox Class A shares for each Roku share they own. The offer values Roku at $160 per share, representing a 33.7% premium to its closing price on Thursday, before reports emerged that the company was exploring strategic options, including a sale.

The acquisition builds on a longstanding relationship between the two companies. In 2020, Fox funded its $440 million purchase of Tubi by selling a 5% stake in Roku that it had held since 2013.

The deal comes as Fox continues to respond to the migration of viewers from traditional television to streaming platforms. The company has expanded its digital offerings in recent years, including the launch of its Fox One subscription service.

Industry competition has also intensified amid a wave of consolidation. Last week, the U.S. Justice Department cleared Paramount Skydance's proposed $110 billion acquisition of Warner Bros. Discovery.

Analysts said acquiring Roku would strengthen Fox's ability to compete in a rapidly evolving media landscape.

"This (deal) gives Fox greater control over discovery, data and monetization at a time when TV viewing continues to shift away from traditional channels," said PP Foresight analyst Paolo Pescatore.

"Bringing together premium content, live sports, advertising and platform distribution under one roof creates a compelling proposition."

Following the transaction, Fox shareholders will own about 73% of the combined company, while Roku investors will hold the remaining stake.

The companies said the deal is expected to close in the first half of 2027 and generate approximately $400 million in annual cost savings. The transaction includes about $14.6 billion in cash, with the remainder paid in stock, and will add roughly $8.3 billion in debt to Fox's balance sheet.