Verizon has announced plans to acquire Yahoo for $4.83 billion, confirming rumours that have been swirling for a number of weeks now.
According to a press release sent to MobileSyrup, the U.S. telecom giant says Yahoo will be integrated into AOL’s operations, which Verizon acquired last year for $4.4 billion.
“We have enormous respect for what Yahoo has accomplished: this transaction is about unleashing Yahoo’s full potential, building upon our collective synergies, and strengthening and accelerating that growth,” said AOL CEO Tim Armstrong in the company’s press release about the acquisition.
In a letter addressed to Yahoo employees and posted on Tumblr, Yahoo CEO Marissa Mayer says she plans to stay with the company, though it’s unclear in what capacity.
“Yahoo is a company that has changed the world, and will continue to do so through this combination with Verizon and AOL,” said Mayer.
“The sale of our operating business, which effectively separates our Asian asset equity stakes, is an important step in our plan to unlock shareholder value for Yahoo. This transaction also sets up a great opportunity for Yahoo to build further distribution and accelerate our work in mobile, video, native advertising and social.”
The terms of the deal indicate Verizon will acquire Yahoo’s brands and email services, which approximately 225 million users around the world use. The telecom will also gain Yahoo’s BrightRoll programmatic ad platform, as well as other web advertising service. The deal, however, does not include Yahoo’s stakes in Alibaba or Yahoo Japan. These divisions of the company will reportedly remain under Yahoo’s banner and will change their name once the core company’s deal with Verizon closes.
“Just over a year ago we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators and advertisers. The acquisition of Yahoo will put Verizon in a highly competitive position as a top global mobile media company, and help accelerate our revenue stream in digital advertising,” said Lowell McAdam, Verizon Chairman and CEO.
The acquisition is still subject to the approval of federal regulators as well as Yahoo’s shareholders. Verizon predicts the acquisition will be completed in the first quarter of 2017 and mentions that until then, Yahoo will continue to operate as an independent company.