Verizon to snap up Yahoo for £3.7bn

US telecoms firm Verizon has said it will a create a mobile media giant after snapping up Yahoo for £3.7bn.

Verizon said the deal will create a company with a billion customers and more than 25 brands.

It will merge Yahoo with AOL, for which it paid £3.4bn last year.

The deal will include Yahoo’s email service and news, finance and sports websites, photo storage site Flickr and its advertising tools. Yahoo’s cash, its shares in Chinese e-commerce giant Alibaba Group Holdings and Yahoo Japan, plus a portfolio of patents, will continue to be held by Yahoo, but it will change its name and begin trading as an investment company.

Verizon said that pending approval from Yahoo’s shareholders and regulators, it expects to complete the deal by the first quarter of next year.

Marissa Mayer, chief executive of Yahoo, said: ‘Yahoo is a company that has changed the world, and will continue to do so through this combination with Verizon and AOL.’

Yahoo has come under pressure from shareholders angry with a downturn in its performance over the past eight years as it lost out to the likes of Google and Facebook. Last year it made a £3.4bn loss.

There was speculation that a deal with Verizon could end the four-year reign of Yahoo boss Mayer, a former Google executive who has failed to turn the company around.