Verizon Communications Inc. (NYSE, NASDAQ: VZ) and Yahoo! Inc. (NASDAQ: YHOO) have renegotiated the agreement the two signed back in July 2016 for the former to acquire the latter (see "Verizon wins Yahoo! auction"), after revelations that Yahoo! had suffered a pair of major cyber attacks. The new terms call for Verizon to pay $350 million less than it had originally offered.
The service provider will now pay approximately $4.48 billion in cash, subject to closing adjustments. The companies expect the deal to close in the second quarter of this year.
The new agreement also calls for the two parties to share certain legal and regulatory liabilities that the data breaches have created. Yahoo! will be responsible for half of any cash liabilities incurred following the closing related to non-SEC government investigations and third-party litigation associated with the cyber attacks. Liabilities arising from shareholder lawsuits and SEC investigations will continue to be the responsibility of Yahoo! as well.
However, neither the data breaches nor any losses arising from them will be taken into account in determining whether a "Business Material Adverse Effect" has occurred or whether certain closing conditions have been satisfied, the parties agreed.
Yahoo! revealed last December that a cyber attack in August 2013 had compromised more than 1 billion user accounts. This revelation followed an earlier announcement that 500 million accounts had been hacked in 2014. Despite the perceived decline in the value of Yahoo! the data breaches caused, Verizon says it still find the prospect of acquiring the internet pioneer compelling.
"We have always believed this acquisition makes strategic sense. We look forward to moving ahead expeditiously so that we can quickly welcome Yahoo's tremendous talent and assets into our expanding portfolio in the digital advertising space," said Marni Walden, Verizon executive vice president and president of Product Innovation and New Businesses.
"The amended terms of the agreement provide a fair and favorable outcome for shareholders. It provides protections for both sides and delivers a clear path to close the transaction in the second quarter," Walden added.
Verizon appears to be cornering the market on first-wave internet companies, having acquired AOL in 2015 (see "Wireless, OTT video at heart of Verizon's AOL buy").
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