14 DAY TRIAL // Yahoo and Verizon confirm the original deal between the two companies has suffered a $350 million price cut, putting the final valuation of Yahoo at $4.48 billion in cash.
"Under the amended terms, 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," the announcement reads.
News about the new deal changes leaked last week, but the two companies did not confirm the terms until now. In the past several months, there have been numerous speculations about the impact the two largest data breaches in history, revealed by Yahoo last September and December, would have on the deal between the two companies. It was expected that the terms would suffer some changes, including a price tag cut, something that has finally been confirmed.
"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," said Marissa Mayer, Yahoo CEO.
50/50 on data breach liabilities, aside from any coming from SEC
Following the amended terms, Yahoo will be responsible for 50% of any cash liabilities incurred following the closing related to non-SEC government investigations, as well as third-party litigation related to the breaches. However, any liabilities arising from shareholders and SEC investigation will continue to be Yahoo's responsibility. Given that Yahoo is currently under SEC investigation for taking too long to notify shareholders of the data breaches, it seems like Verizon simply doesn't want any of that mud on its hands.
Yahoo agreed to sell its operative business and a global audience of more than 1 billion users, as well as 600 million mobile users, to Verizon. After the deal is closed sometime in the second quarter, Yahoo will become Altaba, which will continue to hold 15% in the Chinese e-commerce giant Alibaba and the 35.5% stake in Yahoo Japan.