Telecommunications giant Verizon Communications VZ has announced it will be acquiring Yahoo’s YHOO core internet business at a discount of $350 million for $4.48 billion. The discount is $50 million greater than initially expected.
The newly negotiated deal, expected to close in the second quarter of this year, is due to two irreversible data breaches Yahoo announced in the latter half of 2016. Over one billion users have been impacted, making the breaches the largest ever discovered on the internet.
The first data breach dates back to August 2013 and was reported to the public in December of 2016; the second breach occurred sometime in late 2014 and was announced in September 2016. Both concern hackers compromising Yahoo user accounts in taking information including names and login credentials.
Yahoo is currently facing multiple law suits on the account of negligence. In virtue of the deal taking place, Yahoo and Verizon will split the respective legal costs while Yahoo is arguably facing the biggest penalty in taking a $350 million hit in being acquired.
Wall Street is responding bullishly to the news. Yahoo, a Zacks Rank #3 (Hold), is trading up 0.59% to $45.36 and Verizon, a Zacks Rank #3 (Hold), is up 0.47% to $49.92, intraday.
“The amended terms of the agreement provide a fair and favorable outcome for shareholders”, stated Marni Walden, Verizon’s head of product.
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