Fox Corporation has agreed to give the U.S. Department of Justice additional time to review its proposed $22 billion acquisition of Roku, extending regulatory scrutiny of one of the media industry’s biggest deals of the year.
The agreement gives antitrust officials more time to examine the transaction before Fox can move ahead with its planned takeover of the streaming technology company. The development comes less than two months after Fox and Roku announced the deal, which would combine Fox’s television, sports and news businesses with one of the largest connected-TV platforms in the United States.
Law360 reported Monday that Fox had provided the Justice Department with additional time to conduct its review. The extension does not by itself mean regulators will challenge the transaction, but it underscores the regulatory attention surrounding a deal that would put a major content producer and streaming platform under common ownership.
A $22 Billion Streaming Bet
Fox announced on June 15 that it had reached a definitive agreement to acquire Roku for $160 per share in cash and Fox Class A stock, valuing Roku at approximately $22 billion in enterprise value.
Under the agreement, Roku shareholders are set to receive $96 in cash and 0.9693 shares of Fox Class A common stock for each Roku share. Existing Fox shareholders are expected to own approximately 73% of the combined company after closing, with Roku shareholders owning the remaining 27%.
The transaction would bring together Fox’s portfolio of live sports, news and entertainment programming with Roku’s connected-TV operating system, advertising technology and streaming businesses.
Roku reaches more than 100 million streaming households globally, according to the companies. Fox also owns the ad-supported streaming service Tubi, meaning the combined company would control two significant free, advertising-supported streaming businesses: Tubi and The Roku Channel.
Fox has argued that the acquisition would strengthen its ability to compete as television viewing continues to migrate away from traditional cable and toward streaming.
Why Regulators Could Take a Closer Look
The transaction presents an important antitrust question because Fox is not simply acquiring another television network or content producer.
Related: Fox Urges Court to Reject Newsmax Antitrust Claims
Roku operates a platform through which consumers access competing streaming services, while Fox produces and distributes its own programming and operates competing streaming products.
That combination could prompt regulators to examine whether Fox would have the ability or incentive to favor its own services and content on Roku devices or otherwise disadvantage rival streaming companies that depend on the Roku platform to reach viewers.
The Justice Department has recently emphasized that its Antitrust Division can use more targeted information requests when reviewing mergers while retaining the ability to conduct broader investigations when necessary.
An extended review therefore should not be interpreted as a decision that the Fox-Roku transaction violates antitrust law. Regulators could ultimately clear the acquisition, seek changes or conditions, or attempt to challenge it.
Deal Still Expected to Close in 2027
Despite the additional regulatory review, Fox continues to publicly anticipate completing the Roku acquisition during the first half of 2027.
Fox CEO Lachlan Murdoch reiterated that expected timeline during the company’s latest earnings call.
Roku, meanwhile, enters the regulatory process with momentum in its core business. The company recently reported second-quarter revenue that exceeded Wall Street expectations, supported by strength in advertising and subscriptions.
For Fox, acquiring Roku represents a major strategic shift toward owning not only television programming but also the technology through which millions of households find and watch streaming content.
That strategy could give Fox greater control over distribution, advertising and viewer data as traditional television declines. Those same advantages, however, are likely to be central to the government’s assessment of whether the combination could harm competition.
Source: Law360
