Verizon to acquire Yahoo for $4.8 billion, ending the web pioneer’s struggle for survival

Verizon Communications officially announced on Monday morning that it would acquire Yahoo for $4.83 billion in cash, ending a closely regulated six-month sales process.

Since the auction began in February, Yahoo fielded offers from as many as 40 potential buyers, including AT&T, Quicken Loans, TPG, and Vector Capital Management. The deal—which is expected to close in the first quarter of 2017—boosts Verizon’s AOL Internet business, granting it access to Yahoo’s ad technology tools as well as its core search, mail, and media assets.

Yahoo will continue to operate as an independent company until deal receives final regulatory and shareholder approval; the web pioneer's market value reached approximately $37.4 billion as of the end of the day, on Friday.

Not included in the deal were Yahoo’s 15% stake in Chinese e-commerce company Alibaba Group Holding Ltd, 35.5% stake in Yahoo Japan, Yahoo’s convertible notes, and Yahoo’s non-core patents. “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,” Yahoo Chief Executive Marissa Mayer said in a statement on Monday.  

Analysts estimate that Yahoo’s Excalibur patent portfolio is worth up to $6 billion, and will be sold separately, in a second auction—to who remains to be seen. “Yahoo is running two auctions in parallel – core sale and Excalibur patent portfolio – so we wouldn’t be surprised to see multiple winners.”

Tim Armstrong, CEO of AOL when Verizon acquired it last year, announced in a press release that he will manage a group at Verizon that unifies AOL and Yahoo: “Our mission at AOL is to build brands people love, and we will continue to invest in and grow them, Yahoo has been a long-time investor in premium content and created some of the most beloved consumer brands in key categories like sports, news and finance… We have enormous respect for what Yahoo has accomplished.”

Verizon’s acquisition of Yahoo marks a clear intent to move beyond telecom, and into a media-and-mobile-advertising operation capable of competing with Google.

Source: Yahoo Finance