The U.S. Department of Justice has issued a "Second Request" for information on Fox Corporation's $22 billion acquisition of Roku, signaling an intensive antitrust review. The move extends the deal's timeline, causing shares of both companies to dip on Wednesday. Investors are now tracking potential regulatory delays, the impact of $12 billion in new debt, and the risk of stricter merger conditions.
The U.S. Department of Justice (DOJ) has formally signaled a deeper antitrust review of Fox Corporation’s $22 billion acquisition of the streaming platform Roku. By issuing a "Second Request" for documentation and data on Tuesday, regulators have effectively paused the approval process, requiring both companies to provide a massive amount of internal records. This development has introduced fresh uncertainty into the deal, causing shares of Fox and Roku to decline by approximately 1.5% and 1.6% respectively in Wednesday’s trading session.
This procedural step indicates that the DOJ’s initial review raised serious questions about the merger’s impact on competition. Regulators are primarily focused on the potential risks of combining a major media content producer—like Fox, which owns various news and sports channels—with a dominant streaming distributor like Roku. The inquiry is looking into whether this combination could lead to unfair practices, such as Fox prioritizing its own content on the Roku home screen or leveraging consumer viewing data to consolidate its advertising business, potentially hurting smaller, rival services.
Beyond the regulatory hurdles, investors are paying close attention to the financial structure of the acquisition. The deal is valued at $22 billion, with Fox planning to fund a significant portion through $12 billion in new debt. This level of borrowing would increase the company’s pro-forma net leverage to roughly 2.8 times its earnings. While Fox has stated its intention to maintain an investment-grade credit rating, this increased debt pressure means the company will have less financial flexibility during the integration process. Furthermore, as 40% of the acquisition price is tied to a stock transaction, existing shareholders are also weighing the effects of potential share dilution on their investment value.
The regulatory review process is now expected to last longer, with the companies unable to close the deal until 30 days after they have substantially complied with the DOJ’s requests. Although Fox continues to target a completion date in the first half of 2027, the success of the deal will depend on its ability to satisfy government demands. The risk remains that the DOJ could push for stricter conditions, such as forced divestitures or operational limitations, to alleviate antitrust concerns.
The key monitorable for investors in the coming months will be the progress of this regulatory compliance. Any further extensions, signals of resistance from the DOJ, or additional information requests could continue to weigh on the stock performance of both companies. Shareholders will also be watching for management commentary on how the company plans to manage the increased debt burden while integrating the new business.