VERIZON INC CONFIRM BUYING YAHOO INC’S CORE INTERNET BUSINESS FOR $4.83 BILLION
Verizon Communications Inc said it had agreed to buy Yahoo Inc’s core internet business for $4.83 billion in cash, ending a lengthy sale process for the fading Web pioneer.
Buying Yahoo’s operations will boost Verizon’s AOL internet business, which it bought last year for $4.4 billion, by giving it access to Yahoo’s advertising technology tools as well as other assets such as search, mail and messenger.
The deal marks the end of Yahoo as an operating company, leaving it with a 15 per cent stake in Chinese e-commerce company Alibaba Group Holding Ltd and a 35.5 percent interest in Yahoo Japan Corp.
“The sale of our operating business, which effectively separates our Asian asset equity stakes, is an important step in our plan to unlock shareholder value for Yahoo,” Yahoo Chief Executive Marissa Mayer said in a statement on Monday.
The sale does not include Yahoo’s cash, its shares in Alibaba, its shares in Yahoo Japan, Yahoo’s convertible notes, certain minority investments and Yahoo’s non-core patents.
The Alibaba and Yahoo Japan investments are worth about $40 billion, while Yahoo had a market value of about $37.4 billion as of Friday’s close.
Yahoo’s Alibaba, Yahoo Japan stakes, non-core patents will continue to be held by Yahoo which will change its name and become a publicly traded investment company.
AOL’s Tim Armstrong said that, “combining Verizon, AOL and Yahoo will create a new powerful competitive rival in mobile media”.
Yahoo will be integrated with AOL under Marni Walden, EVP and President of product innovation and new businesses organization at Verizon.
The deal is expected to close in Q1 of 2017
Yahoo will provide additional information about the investment company at a future date.
Combined, AOL and Yahoo will have more than 25 brands in its portfolio.