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Verizon cuts $350M from price to acquire Yahoo

By Allen Cone
Verizon cuts $350M from price to acquire Yahoo
Yahoo, based in Sunnyvale, Calif., agreed to a $350 million reduction in the sale of its company to Verizon, based in New York. The new amount is $4.48 billion. Photo by Mohammad Kheirkhah/UPI | License Photo UPI/Mohammad Kheirkhah | License Photo

Feb. 21 (UPI) -- Verizon is now offering $4.48 billion to acquire Yahoo, $350 million less than its last offer, according to a revised agreement between the two companies.

The disclosure came after two massive data breaches at Yahoo involving about 500 million accounts revealed in September and another one affecting 1 billion accounts announced in December.

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The two companies agreed to share legal and regulatory liabilities involving the breaches that "provide a fair and favorable outcome for shareholders," Marni Walden, Verizon executive vice president and president of Product Innovation and New Businesses, said in a statement. "It provides protections for both sides and delivers a clear path to close the transaction in the second quarter."

Under the amended terms, Yahoo will be responsible for 50 percent of any cash liabilities related to non-Securities and Exchange Commission investigations and third-party litigation. But liabilities arising from shareholder lawsuits and SEC investigations will continue to be the responsibility of Yahoo.

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Verizon's acquisition of Yahoo is expected to close in the second quarter of this year, according a release.

"We have always believed this acquisition makes strategic sense," 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."

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After selling its Internet business, Yahoo will place ownership stakes in Chinese Internet giant Alibaba in a company called Altaba. Also part of Altaba will be Yahoo's 35.5 percent stake in Yahoo Japan.

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Marissa Mayer, Yahoo's CEO since 2012, will step down from the resulting company's board.

"This transaction will accelerate Yahoo's operating business especially on mobile, while effectively separating our Asian asset equity stakes," Mayer said. "It is an important step to unlock shareholder value for Yahoo, and we can now move forward with confidence and certainty."

On July 23, Verizon and Yahoo entered into a stock purchase agreement for Verizon to acquire Yahoo's operating business and global audience.

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Verizon, which also owns AOL, is attempting to expand and improve its own mobile and online video efforts. Yahoo has more than 1 billion users, including more than 600 million mobile users.

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