Company - - Feb 22,2017
On Tuesday, Verizon Communications Inc. announced that it would be buying Yahoo’s core business in a deal fixed for $4.48 billion.
The presently fixed prize for acquisition has been lowered by $350 million from the original offer in the wake of two substantial cyber-attacks struck at the internet company.
Verizon did organize brand studies in order to analyze Yahoo's reputation after the news of the hacks went public, according to a person involved in the talks. This made the company proceed in part since the deal did make some strategic sense and viewed users were loyal and appeared involved.
It is also revealed that, as per the new deal Yahoo and Verizon would be splitting the cost involving few lawsuits which soared from the data breaches.
Verizon aims to merge Yahoo's search, email and messenger assets, along with its advertising technology tools, to its AOL unit. In 2015, Verizon bought AOL for a cost of $4.4bn.
The benefits of the Verizon deal would be soon enjoyed by the company, as Yahoo's more than 1 billion users along with a wealth of data would be accessible for targeted advertising.
As the news of the deal was announced, effects on the share market were quite evident. Verizon's shares surged by 0.3 percent to $49.33 in afternoon trading, whereas, shares of Yahoo were up 0.8 percent settled at $45.48.
Verizon executive vice president Marni Walden stated, “The amended terms of the agreement provide a fair and favorable outcome for shareholders”. She further added this deal offers protection for both the companies and delivers a clear path to seal the transaction as soon as in the second quarter.
However, the current deal does not involve the transfer of Yahoo’s stake in Chinese online retailer Alibaba.
It is also interesting to know that, the price value for the acquisition of Yahoo is well below the figure of $44bn offered by Microsoft in 2008.