Verizon's Purchase of Yahoo Downgraded by $350 Million Due to Data Hacks

SILICON VALLEY, CA -- Verizon and Yahoo have amended the existing terms of their agreement for the purchase of Yahoo's operating business, with the price Verizon will pay to acquire Yahoo's operating business reduced by $350 million.

Verizon's acquisition of Yahoo, now valued at just under $4.5 billion in cash, is expected to close in the second quarter of 2017.

The discount is in part due to a series of harmful information about Yahoo that came to light after the deal was announced last summer, including a September 2016 revelation that data from at least 500 million Yahoo accounts was stolen in 2014. It was the largest such breach ever of an American company.

In addition, New York-based Verizon and Sunnyvale, Calif.-based Yahoo have agreed to share certain legal and regulatory liabilities arising from data breaches incurred by Yahoo in recent months. The companies announced the revised deal in a Feb. 21 joint news release.

"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," Verizon executive vice president and president of Product Innovation and New Businesses Marni Walden said in a statement announcing the revised deal.

"This transaction will accelerate Yahoo's operating business especially on mobile, while effectively separating our Asian asset equity stakes Yahoo CEO Marissa Mayer said. "It is an important step to unlock shareholder value for Yahoo, and we can now move forward with confidence and certainty."

Under the amended terms, Yahoo is responsible for 50 percent of any cash liabilities incurred following the closing related to non-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 sole responsibility of Yahoo.

The two conglomerates entered into a definitive stock purchase agreement in July, 2016, under which Verizon would acquire Yahoo's operating business and global audience of more than a billion users, including more than 600 million mobile users.

In January, Yahoo announced that it would change its name to Altaba if and when its merger with Verizon goes through and that five Yahoo directors will step down at the time of the sale, including current CEO Marissa Mayer, who's been the face of the company since being hired in 2012 and is one of the more powerful women in the technology industry.

Previous Yahoo coverage:

• Goodbye Yahoo, Hello Altaba: Tech Company Changing Its Name
• Yahoo Confirms Massive Data Breach of At Least 500 Million User Accounts
• Yahoo Warns 500 Million Users of 2-Year-Old Hack

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