Verizon has slashed $350 million from its original $4.83 billion offer to acquire Yahoo as part of a new purchase deal negotiated in the wake of two massive data breaches at the troubled-internet giant.
In a Tuesday press release, Verizon confirmed a new offer of $4.48 billion in cash as part of a deal expected to close in the second quarter. Verizon maintained the deal will enhance the carrier’s growth strategy of “providing a cross-screen connection for consumers, creators, and advertisers.”
“We have always believed this acquisition makes strategic sense,” Verizon EVP and President of Product Innovation and New Businesses Marni Walden said. “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.”
Along with the discount, Verizon also locked Yahoo in to pay half of any cash liabilities that come as part of non-Securities and Exchange Commission government investigations or third-party lawsuits that stem from the data breaches. Liabilities from shareholder lawsuits and SEC investigations will continue to be the responsibility of Yahoo, the carrier said.
The renegotiated deal follows revelations last year of two massive data breaches at Yahoo, a hack in 2014 that exposed the personal information of around 500 million customer accounts and an even larger infiltration in August 2013 that impacted more than one billion accounts. Those incidents were disclosed several years after the fact, in September and December 2016, respectively.
After the initial breach, rumors swirled that Verizon might either seek a price cut or back out of the deal entirely. Reports from last week suggested negotiations for the former were in progress, and Verizon confirmed the new deal this week.
Walden indicated the amended terms “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.” And it seems those protections will be key.
The SEC has reportedly opened an investigation into the timing of Yahoo’s breach announcements to see whether the hacks should have been disclosed sooner. Additionally, Yahoo has already been hit with class action lawsuits over the breach, meaning payouts to users could be headed down the judicial pipeline.
