Mega-mergers and big acquisitions: What are the impacts for consumers

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Mega-mergers and big acquisitions: What are the impacts for consumers?

Q&A with Hamza Abdurezak, senior lecturer at the School of Business and Economics

By Steve Foskett
June 24, 2026 • Business

When two large companies combine, or when one very large company absorbs another, there are often many layers of economic theory, and both short and long-term business strategy, at play. We talked with Hamza Abdurezak, senior lecturer at the School of Business and Economics, about the details and the fine print behind Fox's blockbuster acquisition of streaming service Roku, and what it means for news and streaming consumers in a rapidly evolving media marketplace.

Why does it make economic sense for two very large companies like Fox and Roku to come together?

The first and the primary rational or economic reason provided for these two large companies coming together is strategic. Fox owns premium live content such as Fox News, Fox Sports, and Entertainment and the Tubi advertising-based video-on-demand service, while Roku owns the connected-TV (CTV) layer that sits between the content and the viewer. The two companies are presenting this [deal] as creating a media and technology platform reaching over 100 million households, becoming the third-largest player in the U.S. market by viewership.

What are outside factors that may have triggered the deal?

Three main forces are driving this acquisition:

• The secular shift to streaming. Fox is still tied largely to legacy pay-TV, and the Roku acquisition gives it a growing streaming platform asset as it transitions away from linear tv.
• It's an advertising land-grab. Both Fox and Roku operate from a largely ad-driven revenue base. Pooling Roku first-party household data with Fox/Tubi inventory targets the CTV ad market, where they can compete with the likes of Netflix, Amazon and Google.
• In an industry that is consolidating, Roku cannot remain a standalone business because it does not have the scale it needs to survive. So it was likely looking for a larger buyer.

In addition to the strategic rationale, there could be quantifiable financial synergies that can be categorized as revenue enhancement and cost reduction synergies. By combining forces, they can use Roku's smart data to show more relevant (and expensive) ads. They'll also put Fox's big hits, like the NFL, front and center on your TV screen to get more views. They expect to save $400 million by cutting "double work." Instead of two sets of offices, legal filings, and marketing teams, they'll just have one.

Overall, the acquisition makes both strategic and economic/financial sense if executed properly post-merger/acquisition. That could be a question mark, because most mergers and acquisitions transactions fail because of post-merger integration issues.

Why did shares of the two companies slide slightly on the stock market after the announcement? Why would investors not be happy about this?

People guessed Fox would buy Roku, so they bought shares early. By the time it was official, the "hype" was already baked into the price. Also, Fox is paying partly with its own stock. Because Fox's stock price dropped, the value Roku shareholders were promised dropped along with it. Fox is borrowing a lot of money to acquire Roku, and investors can get nervous when a company takes on massive debt it might have trouble paying off. Feeling some buyer's remorse, Fox investors may have thought they paid too much for Roku, so they sold Fox shares in frustration.

The deal has been characterized as an acquisition. What does that term mean in an economics context? Is the same thing as saying Fox bought Roku?

The reason why this deal is characterized as an acquisition is because Fox, as the larger company in the deal, is buying or acquiring Roku, the smaller company. When a larger company - in this case, Fox - buys or acquires a smaller company - Roku - it is characterized as acquisition. However, if two companies of similar sizes combine, we call them mergers. Mergers and acquisitions are more legal terms, but in economic terms, both reflect change of control or ownership, and are effectively similar.

Do you see any trends or noteworthy aspects of the Fox/Roku deal? Did anything stand out to you? Is this a new way of doing business, or is it out of a classic playbook?

Yes, I see an ongoing trend toward further media consolidation. The one that has been in the headlines in recent months is Paramount Skydance/Warner Bros. Discovery. After many months of contest between Paramount Skydance and Netflix, WBD accepted $31 a share offers from Paramount Skydance, beating Netflix. Note that Skydance itself only acquired Paramount and created Paramount Skydance in 2025. Similarly, Disney acquired Fubo and merged it with Hulu + Live TV in 2025. These are just a few examples of these ongoing media consolidation trends, domestically and internationally.

Traditional media and entertainment is being affected by technology, and that is spurring these trends. I believe this will continue. When an industry is ripe for consolidation and spurred by technology, this is a classic playbook of industry going through waves of merger and acquisition deals.