New York, May 12, 2015 -- Verizon Communications Inc. ("Verizon" or "the company") announced today its plans to acquire AOL Inc. ("AOL") for $50 per share, an estimated total value of approximately $4.4 billion. The transaction will be funded with cash on hand and commercial paper. The transaction is subject to customary regulatory approvals and closing conditions and is expected to close this summer. Moody's believes that the transaction is slightly credit negative to the extent that it could delay Verizon's previously planned deleveraging trajectory. However, despite the high acquisition multiple, Moody's believes that the transaction will support Verizon's long term strategy of promoting and monetizing mobile video. The addition of AOL's ad insertion platform should allow Verizon to advance its revenue model for mobile video. This, in conjunction with Verizon's consistent network investment and high quality wireless assets, should result in a profitable, differentiated mobile video offering ahead of the competition. More importantly, the ability to differentiate service should also result in a recapture of pricing power versus its value-centric peers who are pressuring industry pricing.

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