The Justice Department is expanding its antitrust review of Fox Corp.’s planned $22-billion purchase of Roku, Semafor reported on Tuesday.

  • Semafor reported that Justice Department staff plan what regulators call a “second request,” a formal demand for more data and files.
  • The concern, the report said, is how the combination could affect the way viewers reach streaming content. 
  • Rivals worry Fox could promote its own programming on Roku’s home screen if the deal goes through. 

Shares of Roku Inc. (ROKU) slipped 3% after-hours on Tuesday following a report that the Justice Department is expanding its antitrust review of Fox Corp.’s planned $22-billion purchase of Roku.

Semafor first reported the development, citing people familiar with the matter. NASDAQ-listed shares of Fox Corp (FOX) stayed little changed after-hours.

Fox-Roku Deal 

Fox and Roku announced the cash-and-stock deal on June 15. Roku holders would get $96 in cash plus 0.9693 Fox Class A shares per share, a package valued at $160 a share and about $22 billion in enterprise value.

Fox shareholders would own about 73% of the combined company and Roku holders 27%. Closing is targeted for the first half of 2027, subject to shareholder and regulatory approval. Founder Anthony Wood would join Fox’s board and keep an operating role. The companies projected about $400 million a year in cost savings.

Fox would add Roku’s connected-TV software, The Roku Channel, and an audience the firms put at more than 100 million streaming households. Fox would contribute news, sports, and Tubi. Together, they said, the businesses would rank among the largest U.S. television platforms by viewing share.

Why A Second Request Matters

Semafor reported that Justice Department staff plan what regulators call a “second request,” which is a formal demand for more data and files. The concern, Semafor said, is how the combination could affect the way viewers reach streaming content.

Rivals worry Fox could promote its own programming on Roku’s home screen. Fox-owned Tubi and The Roku Channel already compete for free, ad-supported viewers. Fox Chief Executive Lachlan Murdoch has said he expects to keep the businesses separate while selling ads across both. In June, he argued Fox has long hosted partners’ content while monetizing platforms. Fox and the DOJ declined to comment to Semafor.

How Did ROKU, FOXA Retail Traders React?

On Stocktwits, retail sentiment around ROKU rose from ‘neutral’ to ‘bullish’ over the past 24 hours, while message volume stayed at ‘low’ levels.

Meanwhile, sentiment around FOX rose from ‘bearish’ to ‘neutral.’

While ROKU shares have gained 43% year-to-date, FOX has fallen 10%. 

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