Last year, Verizon Communications Inc. outbid several suitors to buy Yahoo Inc.’s struggling internet business. But the phone giant had to scramble to keep the deal from unraveling after Yahoo disclosed two massive data breaches. But now, according to a report Tuesday in The Wall Street Journal, Verizon is close to announcing a revised takeover deal with Yahoo that will cut the price by as much as $350 million. CNBC reported last week that the revised offer could cut the deal price by about $300 million.
In July, Verizon agreed to buy Yahoo for $4.8 billion, but since then, Yahoo has reportedly disclosed two massive data breaches. In December, analysts told CNBC that Verizon might use the new breaches to reduce the price of the Yahoo acquisition.
— AP Business News (@APBusiness) February 21, 2017
The WSJ reported that the two companies will also split any future liabilities and costs that arise from the data breaches. Yahoo and Verizon were not immediately available for comment.
When Yahoo reported earnings in January, CEO Marissa Mayer gave reassurances that the company’s commitment to the security of its users was “unwavering,” and that integration planning was a top priority. Verizon’s acquisition of Yahoo will give the company a scale for its internet advertising business, which already includes AOL.
According to a report from Bloomberg last week, Verizon had tentatively reached a revised deal that lowered Yahoo’s price by about $250 million.
Verizon agreed to buy Yahoo’s ailing internet business last July for $4.8 billion. The revised deal is worth about $4.5 billion in cash. Both companies see the deal closing in the second quarter, Bloomberg reported.
Yahoo said in January that the breaches, which affected more than a billion user accounts, could result in the termination of the deal. However, Verizon CEO Mowell McAdam chose to move ahead with the deal because it would help the wireless carrier take on Google and Facebook, the Journal reported.
By following through, Verizon will be able to expand its targeted advertising platform. Verizon could also become a major media company by owning the extensive reach of Yahoo’s news, sports, and finance sections.
The Securities and Exchange Commission (SEC) is investigating whether Yahoo should have told investors about the hacks sooner.
“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.