Fox Corp to buy Tubi, sell Roku stake March 18, 2020 08.24 Europe/London By Chris Dziadul Fox Corporation has entered into a definitive agreement to acquire the free ad-supported service Tubi for around $440 million in cash. Funding for the transaction will be obtained principally from the sale of its 5% stake in Roku. Tubi, which is currently available on more than 25 digital platforms in the US, features over 20,000 titles and 56,000 hours of film and episodic TV programming from over 250 content partners, including many of the major studios. Its usage and monetisation have doubled in the last 12 months. Tubi will seamlessly integrate with and deepen Fox’s capabilities in such areas as digital advertising, direct-to-consumer interfaces and personalisation technology. Similarly, Tubi will be able to fully leverage Fox’s advertising and distribution relationships, as well as its national and local promotional platforms. Fox plans to continue to run Tubi as an independent service and evaluate expanding its offer through using its own expertise in local ness and sports programming rather than original content. Commenting on the acquisition, Fox Corporation’s executive chairman and CEO Lachlan Murdoch said: “Tubi will immediately expand our direct-to-consumer audience and capabilities and will provide our advertising partners with more opportunities to reach audiences at scale. Importantly, coupled with the combined power of FOX’s existing networks, Tubi provides a substantial base from which we will drive long-term growth in the direct-to-consumer arena.” Tubi Founder and CEO Farhad Massoudi, who will continue to head Tubi, added: “Fox Corporation’s relationships with advertisers and distribution partners, combined with the company’s dominance in news and sports programming, will help Tubi continue to grow and differentiate itself in the high-growth ad-supported streaming marketplace. I am proud of what the team has already accomplished here at Tubi and we couldn’t be more excited about joining such a fast-moving, entrepreneurial company. We look forward to working together with FOX to accelerate Tubi’s leadership position in the market and bring new competencies to Fox.” Fox will finance the Tubi acquisition principally with the net proceeds from the completed sale of its stake in Roku, Inc. In doing so, it will preserve its balance sheet capacity by essentially exchanging a passively held minority investment for full ownership and control of a leadership position in the free ad-supported streaming market. On the sale of Fox’s ownership stake in Roku, Murdoch added: “We were an early investor in Roku and continue to admire the ongoing accomplishments of Anthony Wood and his team. We are pleased to expand our partnership with them as a result of the Tubi acquisition.” The Tubi transaction, which is subject to regulatory approvals and the satisfaction or waiver of customary closing conditions, is expected to close before June 30, 2020. Allen & Company is acting as financial adviser to Fox and Jenner & Block and Kirkland & Ellis LLP are acting as Fox’s legal advisers regarding the transaction. Qatalyst Partners is acting as sole financial adviser to Tubi, and Fenwick & West LLP is acting as its legal adviser.