Here's What Fox Buying Roku Means for Netflix Investors
Written by Anders Bylund for The Motley Fool -> Netflix is actively applying lessons learned from its failed Warner Bros. Discovery bid to remain disciplined in future deal negotiations. Acquiring a hardware platform like Roku could have created significant friction with existi
Netflix is actively applying lessons learned from its failed Warner Bros. Discovery bid to remain disciplined in future deal negotiations.
Acquiring a hardware platform like Roku could have created significant friction with existing partners such as Sony and Amazon.
While walking away from Roku, Netflix is still exploring smaller strategic opportunities.
It's a bit weird to see Roku (NASDAQ: ROKU) accepting a buyout offer from Fox (NASDAQ: FOX) (NASDAQ: FOXA) .
If you know Roku's history, you're watching a former Netflix (NASDAQ: NFLX) subsidiary shack up with a different media company and video-streaming veteran. The irony grows richer when you recall that Netflix spun out its streaming hardware operations to avoid regulatory scrutiny. Bundling Roku with a market-leading content provider like Netflix might have raised antitrust concerns with the Department of Justice and the Federal Trade Commission.
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Yet Roku has taken Fox's $22 billion bid and expects smooth sailing through the regulatory reviews. Rumor has it that Fox won a bidding war against Netflix. Are media mergers different today, or is it just Netflix's habit to back down from expensive buyout ideas?
I'm looking back at Netflix's fizzled takeover of Warner Bros. Discovery , of course. Going beyond a total enterprise value of $82.7 billion was never an option, and now Paramount Skydance is saddled with a $110 billion cash commitment.
