The purchase creates the third largest player in the American television market in terms of viewership, according to Fox.
Merging Roku, which has over 100 million subscribers, with the ad-supported Fox channel Tubi creates a powerful player in free streaming services, Lachlan Murdoch, CEO of Fox, said in a statement.
"This combination will shift our company's focus to a fast-growing direction and provide a step change in our overall growth profile," he said.
The news caused Roku shares to initially rise sharply before falling back 2.2 percent. Fox took an even bigger hit, with the stock falling 16.8 percent.
