Verizon to Buy Yahoo’s Core Internet Business for $350 Million Less Than Originally Agreed
Verizon has reached a deal with Yahoo to buy its core internet business for $350 million less than originally agreed.
Doubts had been cast over the original deal after it emerged that Yahoo had been hit by two huge cyber attacks.
Following the price cut, the US telecoms giant said it was now buying the Yahoo business for about $4.48 billion.
Under the new deal, Verizon and Yahoo will split the cost of some lawsuits arising from the data breaches.
Verizon wants to combine Yahoo’s search, email and messenger assets, as well as its advertising technology tools, with its AOL unit.
The company bought AOL in 2015 for $4.4 billion.
Verizon sees mobile video and advertising as new sources of revenue outside an overcrowded US telecoms market.
In December 2016, Yahoo admitted it had been hit by a large cyber attack in 2013 which affected more than a billion customer accounts.
Yahoo had already admitted another breach in 2014 that had affected about half a billion users.
Under the amended deal Yahoo and Verizon will each be responsible for 50% of any liabilities arising from government investigations and third party litigation related to the data breaches.
Yahoo will still be solely responsible for any liabilities arising from shareholder lawsuits and Securities and Exchange Commission investigations.
Verizon executive vice president Marni Walden said: “The amended terms of the agreement provide a fair and favourable outcome for shareholders. It provides protections for both sides and delivers a clear path to close the transaction in the second quarter.”
The deal does not give Verizon any part of Yahoo’s stake in Chinese online retailer Alibaba.
The price tag for the takeover is well below the $44 billion Microsoft offered for Yahoo in 2008, or the $125 billion it was worth during the dotcom boom.