After months of rumors, Verizon has finally announced amended terms to its proposed acquisition of Yahoo’s operating business, with the duo agreeing to cut the final value by $350 million.
“The amended terms of the agreement provide a fair and favorable outcome for shareholders,” said Marni Walden, Verizon’s executive vice president and president of product innovation and new businesses. “It provides protections for both sides and delivers a clear path to close the transaction in the second quarter.”
Verizon first confirmed plans to acquire Yahoo for $4.8 billion in July of last year, however in the months that followed, a series of scandals emerged regarding Yahoo. One of these involved hackers illegally accessing millions of users’ accounts, and then a few months later another hack was revealed that impacted more than one billion accounts — considered the largest data breach in history. These controversies led to ongoing speculation that Verizon would seek a significant reduction to the previously agreed upon acquisition price — some reports from last year suggested Verizon was looking to reduce its bill by up to $1 billion.
However, Verizon has now confirmed it has reached an agreement to pay $4.48 billion in cash, with Verizon also sharing “certain legal and regulatory liabilities” arising from data breaches. Indeed, Verizon and Yahoo will share responsibilities relating to investigations by government bodies and third-party litigation, though Yahoo will assume full responsibility for any shareholder or SEC lawsuits.
“This transaction will accelerate Yahoo’s operating business, especially on mobile, while effectively separating our Asian asset equity stakes,” added Yahoo CEO Marissa Mayer. “It is an important step to unlock shareholder value for Yahoo, and we can now move forward with confidence and certainty.”
The deal is now expected to close in Q2 2017. As a result of the acquisition, Verizon will integrate Yahoo’s operating business alongside AOL, which Verizon snapped up separately in a $4.4 billion deal in 2015.