As firework volleys launched out of New York City harbor last night, a very different celebration was likely taking place just a few blocks down the street at Verizon’s official headquarters in Midtown.
The telco, which owns TechCrunch for hopefully just a few more weeks pending the close of the Apollo acquisition of our parent company Verizon Media, announced overnight that it had signed an agreement with Z Holdings, a division of Japan’s SoftBank Group, to sell trademarks within the Japan market around the Yahoo brand and related tech infrastructure for approximately $1.6 billion.
The extremely descriptive Z Holdings owns SoftBank’s internet businesses in Japan, most notably Yahoo Japan, whose web portal remains the country’s most trafficked news website. Under its most current agreement with Verizon Media (formerly Oath, formerly AOL + Yahoo), Yahoo Japan paid a regular royalty for the rights to use the Yahoo brand name in Japan and associated technologies. Those royalties will now stop in lieu of a one-time upfront payment.
The resolution of the agreement was one of the key nuances left to figure out in Apollo’s $5 billion buyout of Verizon Media. The deal with Z Holdings is pending the close of that transaction, and the $1.6 billion consideration will provide some early cash following Apollo's purchase. In separate news, Bloomberg has reported that Verizon Media has been marketing $1.5 billion in loans to help underwrite part of its acquisition by Apollo, as is typical in private equity leveraged buyouts.
The Apollo purchase of Verizon Media will give Verizon corporate significant additional cash as it works to pare down its debt load acquired from a spending spree on wireless spectrum auctions, such as its $52.9 billion acquisition of C-band spectrum earlier this year.
In a press statement from Z Holdings, the company said that “Although the Yahoo Japan License Agreement will be terminated, Yahoo Japan and Verizon Media will retain their cooperative business and technology relationship. Yahoo Japan will continue to deliver more convenient and innovative services under the ‘Yahoo! JAPAN’ brand, based on its mission statement: ‘UPDATE JAPAN.’” Expect further patches to Japan to be delivered shortly, I guess.
Update July 6, 2021: Clarified that proceeds of the deal will stream to Verizon Media, given the timing of the closing of the deal.