Fox’s $22 Billion Roku Takeover Nears US Antitrust Approval

Fox Corporation Class B (FOX) reported Q1 revenue of $4.57B, adjusted EPS of $2.54, and 54% adjusted EBITDA growth. Its Roku acquisition awaits DOJ review after shareholder and regulatory approvals. FOX One gained subscribers, mostly without traditional cable. JPMorgan raised its price target to $83.

Roku's Q3 2026 ad revenue rose 23% to $727.4M, with a 7% drop in average impression price. Video impressions grew 33%, and ad gross margin increased to 63.2%. The company did not provide a financial outlook due to its pending acquisition by Fox Corporation.

Roku reported strong Q3 results, with revenue of $1.5B (up 24% YoY) and EPS of $1.20, beating estimates. Fox Corp (FOXA) is acquiring Roku (ROKU) for $160 per share, a deal seen as justified by Roku's growth. Fox's stock rose 7.12% on the news. Roku's ad and subscription revenue both grew 23%, but device margins were negative. The deal is expected to close in 2027, pending regulatory approval.

Roku reported Q3 hardware losses doubling to $48.6M due to AI chip shortage, with negative 25.1% gross margin. Despite a 33% revenue increase from price hikes, hardware losses remain significant. Roku's net income rose to $183.3M, with total revenue at $1.5B.

FOXA shares rose 7.1% after reporting Q1 2027 earnings of $2.54 per share, beating estimates of $2.06, and revenue also exceeded forecasts. Advertising revenue increased 47%, driven by the World Cup, political ads, and Tubi's growth. The company's stock has had limited volatility, with today's move being notable but not transformative. FOXA is down 8.6% YTD and trades 11.4% below its 52-week high.

The deal spread between Foxa (FOXA) and Roku (ROKU) narrowed to 64 cents Tuesday amid reports the DOJ may soon approve their $22B merger under a consent decree. Foxa has received all foreign approvals and aims to close the deal as soon as possible, according to the company. The DOJ's review is on a fast track, with staff finalizing their investigation.