Verizon Communications said on Tuesday it would buy Yahoo's core business for $4.48 billion, lowering its original offer by $350 million in the wake of two massive cyber attacks at the internet company.
Verizon and Yahoo have agreed to reduce the price Verizon will pay to acquire Yahoo's operating business by $350 million. In addition, Verizon and Yahoo will share certain legal and regulatory liabilities arising from certain data breaches incurred by Yahoo.
Marni Walden, Verizon executive vice president and president of Product Innovation and New Businesses, said: "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."
Walden added, "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."
Marissa Mayer, CEO of Yahoo, said: "We continue to be very excited to join forces with Verizon and AOL. This transaction will accelerate Yahoo's operating business especially on mobile, while effectively separating our Asian asset equity stakes. It is an important step to unlock shareholder value for Yahoo, and we can now move forward with confidence and certainty. We have a terrific, loyal, experienced team at Yahoo. I'm incredibly proud of our team's strong product and financial execution in 2016, setting the stage for a successful integration."
Under the amended terms, Yahoo will be responsible for 50 percent of any cash liabilities incurred following the closing related to non-SEC (Securities and Exchange Commission) government investigations and third-party litigation related to the breaches. Liabilities arising from shareholder lawsuits and SEC investigations will continue to be the responsibility of Yahoo.
Also under the amended terms, the data breaches or losses arising from them will not be taken into account in determining whether a "Business Material Adverse Effect" has occurred or whether certain closing conditions have been satisfied.
Verizon's acquisition of Yahoo - now valued at approximately $4.48 billion in cash, subject to closing adjustments - is expected to close in second-quarter 2017.
The revised agreement comes as Verizon and its main rival, AT&T, try to find new ways to grow in an oversaturated market for wireless services. AT&T has proposed an $85.4 billion takeover of Time Warner to boost its content offerings to subscribers. Time Warner is the parent of cable channels HBO and CNN, as well as film studio Warner Bros.