Verizon Communications Inc. and Yahoo! Inc. today announced that they have entered into a definitive agreement under which Verizon will acquire Yahoo’s operating business for approximately $4.83 billion in cash, subject to customary closing adjustments.
Yahoo will be integrated with AOL under Marni Walden, EVP and President of the Product Innovation and New Businesses organization at Verizon.
Yahoo reaches a global audience of more than 1 billion monthly active users, including 600 million monthly active mobile users, through its search, communications and digital content products, said Verizon in a press release.
Purchasing Yahoo’s Internet business will boost Verizon’s AOL internet outfit which the company purchased last year for $4.4 billion. The addition of Yahoo to Verizon and AOL will also create one of the largest portfolios of owned and partnered global brands with extensive distribution capabilities.
Yahoo’s key assets include content brands in major categories including finance, news and sports, as well as one of the most popular email services globally with approximately 225 million monthly active users, said Verizon.
Additional technology assets in the advertising space include Brightroll, a programmatic demand-side platform; Flurry, an independent mobile apps analytics service; and Gemini, a native and search advertising solution.
The sale does not include Yahoo’s cash, its shares in Alibaba Group Holdings, its shares in Yahoo Japan, Yahoo’s convertible notes, certain minority investments, and Yahoo’s non-core patents. These assets will continue to be held by Yahoo, which will change its name at closing and become a registered, publicly traded investment company. Yahoo will provide additional information about the investment company at a future date, Verizon said.
The deal is subject to customary closing conditions, approval by Yahoo’s shareholders, and regulatory approvals, and is expected to close in Q1 of 2017. Until the closing, Yahoo will continue to operate independently, offering and improving its own products and services for users, advertisers, developers and partners.
“We have enormous respect for what Yahoo has accomplished: this transaction is about unleashing Yahoo’s full potential, building upon our collective synergies, and strengthening and accelerating that growth,” said Tim Armstrong, CEO of AOL.
“Combining Verizon, AOL and Yahoo will create a new powerful competitive rival in mobile media, and an open, scaled alternative offering for advertisers and publishers,” he added.