Verizon To Buy Yahoo In $4.83 Bln Deal

(RTTNews) - Telecom giant Verizon Communications Inc. (VZ) has agreed to acquire the operating business of struggling Internet company Yahoo Inc. (YHOO) for about $4.83 billion in cash, the two companies said Monday.

Yahoo, under CEO Marissa Mayer, has been struggling for the last four years to win back the market share it lost to Internet giants like Facebook Inc. (FB) and Google, a unit of Alphabet Inc. (GOOGL, GOOG).

In February, Yahoo started seeking bids for its core web businesses, which include its search and media content operations. Verizon had emerged in recent days as the front runner to acquire Yahoo.

The transaction is expected to close in the first quarter of 2017. Until the closing, Yahoo will continue to operate independently, offering its own products and services for users, advertisers, developers and partners.

However, the sale does not include Yahoo's cash, its shares in Alibaba Group Holding (BABA) as well as Yahoo Japan, Yahoo's convertible notes, certain minority investments, and Yahoo's non-core patents - called the Excalibur portfolio.

These assets will continue to be held by Yahoo, which will change its name at closing and become a registered, publicly traded investment company.

Lowell McAdam, Verizon Chairman and CEO, said, "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."

Verizon said that Yahoo will be integrated with AOL under Marni Walden, EVP and President of the Product Innovation and New Businesses organization at Verizon. Verizon acquired AOL last year.

Under its CEO Tim Armstrong, AOL has invested in and grown brands, including The Huffington Post, TechCrunch, Engadget, Makers and AOL.com, and programmatic platforms - including ONE by AOL for both advertisers and publishers.

Verizon said it will generally issue cash-settled Verizon restricted stock units or RSUs for Yahoo RSUs that are outstanding at the close.

Yahoo will provide additional information about the investment company at a future date. The company plans to return substantially all of its net cash to shareholders and will determine and communicate a specific capital return strategy at an appropriate time.

YHOO closed Friday's trading at $39.38. In Monday's pre-market activity, the stock is down $0.45 or 1.14 percent to $38.93.