Verizon, Yahoo cut merger price by $350m

new york — Verizon Communications Inc will acquire Yahoo Inc’s Internet properties at a $350 million discount after revelations of security breaches at the web company.

The acquisition, now valued at $4.48 billion in cash, is expected to close in the second quarter, the companies said in a statement on Tuesday. In addition to the price cut, Verizon and the entity that remains of Yahoo after the deal, to be renamed Altaba Inc, will share any ongoing legal responsibilities related to the breaches.

The move brings Verizon another step closer to adding Yahoo and its billion users as it tries to expand beyond a maturing wireless and landline business into mobile media and advertising ventures. The company is also exploring other acquisitions at a time when regulations are loosening and broader M&A strategies are taking hold under a deal-friendly President Donald Trump.

The revised terms 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,” she said.

Verizon executives had some misgivings about the deal in recent months, frustrated by a lack of progress in investigating the security breaches, Bloomberg reported in October. Still, the companies have been working on combination plans, including more than 20 integration tracks to bring Yahoo’s business into the fold.

Shares of Verizon climbed 0.5 per cent to $49.43 at 9.40am in New York. Yahoo, based in Sunnyvale, California, rose 0.7 per cent to $45.40. Yahoo shareholders would have to approve the revised deal.

Yahoo said in December that cyberthieves in 2013 siphoned information including users’ email addresses, scrambled account passwords and dates of birth. The stolen data may allow criminals to go after more sensitive personal information elsewhere online. — Bloomberg