After some bumps along the way, including a security-related setback, telecom giant Verizon on Tuesday announced that it has closed its acquisition of Yahoo for $4.48 billion.
Following approval from Yahoo shareholders last week, Verizon has officially gained Yahoo's popular media assets, including its sports and finance content. The Basking Ridge, N.J.-based carrier plans to combine Yahoo's assets with the AOL assets it had acquired in 2015 into a subsidiary called Oath. The new business unit will be led by former AOL CEO Tim Armstrong.
Yahoo's former CEO Marissa Mayer, along with Yahoo co-founder David Filo and four other members, have resigned from the board of directors of the remaining part of the company not acquired by Verizon, which is being called Altaba. Mayer has been paid out more than $23 million in cash, equity and benefits, according to a Yahoo filing with the U.S. Securities and Exchange Commission (SEC).
Verizon in February successfully renegotiated the price tag for Yahoo following revelations that Yahoo's network suffered two massive security breaches in 2013 and 2014, with the 2013 attack being called the "largest hack to date" by security analysts. Both breaches put more than 1.5 billion user accounts at risk when cyber criminals gained access to user information, including e-mail addresses, birthdays, and scrambled passwords.
Verizon has since agreed to buy the ailing internet giant for $4.48 billion, a $350 million discount from its original offer of $4.83 billion.
The acquisition will help Verizon bolster its content strategy, especially as many of the incumbent telecom providers -- including Dallas-based rival AT&T -- attempt to expand their portfolios into mobile media and entertainment, past their landline and wireless roots.
“The close of this transaction represents a critical step in growing the global scale needed for our digital media company,” said Marni Walden, Verizon's president of Media and Telematics business unit, in a statement. “The combined set of assets across Verizon and Oath, from [virtual reality] to [artificial intelligence], 5G to IoT, from content partnerships to originals, will create exciting new ways to captivate audiences across the globe.”
Under the amended deal, Verizon and Yahoo are splitting cash liabilities tied to government investigations related to the breaches. Liabilities arising from shareholder lawsuits and investigations by the SEC will continue to be the responsibility of Yahoo, the two companies said.