Verizon revises deal with Yahoo to US$4.48b

Verizon said it agreed to buy the core internet business of Yahoo for US$4.48 billion (S$6.35 billion).
Verizon said it agreed to buy the core internet business of Yahoo for US$4.48 billion (S$6.35 billion). PHOTO: REUTERS

WASHINGTON (REUTERS) - Verizon Communications, the No. 1 US wireless carrier, said on Tuesday it agreed to buy the core internet business of Yahoo for US$4.48 billion (S$6.35 billion), reflecting a US$350 million cut to the original price.

The deal, which is expected to close in the second quarter, will combine Yahoo's search, email and messenger assets as well as advertising technology tools with its AOL unit.

Verizon had been trying to persuade Yahoo to amend the terms of the agreement to reflect the economic damage from two cyber attacks.

Verizon's shares rose 0.6 per cent to US$49.50 in early trading, while Yahoo's shares were up 0.3 per cent at US$45.25.

Under the amended terms, Yahoo and Verizon will split any future liabilities and costs that arise from the data breaches.

Yahoo will continue to be responsible for liabilities from shareholder lawsuits and Securities and Exchange Commission investigations.

"The amended terms of the agreement provide a fair and favorable outcome for shareholders," Marni Walden, head of product innovation and new business at Verizon, said in a statement.

Yahoo said in December that it had uncovered a massive cyber attack, where data from more than 1 billion user accounts was compromised in August 2013, making it the largest breach in history.

This followed the company's disclosure in September that at least 500 million accounts were affected in another breach in 2014.

Verizon has been looking to mobile video and advertising for new sources of revenue outside the oversaturated wireless market.