The acquisition, now valued at $4.48 billion in cash, is expected to close in the second quarter, the companies said in a statement Tuesday. In addition to the price cut, Verizon and the entity that remains of Yahoo after the deal, to be renamed Altaba Inc., will share any ongoing legal responsibilities related to the breaches.
The move brings Verizon another step closer to adding Yahoo and its billion users as it tries to expand beyond a maturing wireless and landline business into mobile media and advertising ventures. The company is also exploring other acquisitions at a time when regulations are loosening and broader M&A strategies are taking hold under a deal-friendly President Donald Trump.
The revised terms provide a “fair and favorable outcome” for shareholders, said Marni Walden, Verizon’s executive vice president and president of product innovation and new businesses. “It provides protections for both sides and delivers a clear path to close the transaction in the second quarter,” she said.
Verizon executives had some misgivings about the deal in recent months, frustrated by a lack of progress in investigating the security breaches, Bloomberg reported in October. Still, the companies have been working on combination plans, including more than 20 integration tracks to bring Yahoo’s business into the fold.
Shares of Verizon climbed 0.5 percent to $49.43 at 9:40 a.m. in New York. Yahoo, based in Sunnyvale, California, rose 0.7 percent to $45.40. Yahoo shareholders would have to approve the revised deal.
Yahoo said in December that cyberthieves in 2013 siphoned information including users’ e-mail addresses, scrambled account passwords and dates of birth. The stolen data may allow criminals to go after more sensitive personal information elsewhere online. The announcement followed news in September of a 2014 breach that affected at least 500 million customer accounts.
Last month, Yahoo said the sale would be delayed to the second quarter as the company assesses the impact from the breaches and meets closing conditions. The deal was first announced in July and had been set to wrap in the first quarter of 2017.
Yahoo Chief Executive Officer Marissa Mayer has been under pressure to conclude the deal. Her failure to turn around the company led to a bidding process that Verizon won in July. Mayer was running the company when both of the hacks took place.
“It is an important step to unlock shareholder value for Yahoo, and we can now move forward with confidence and certainty,” Mayer said of the transaction.
Yahoo had said it hadn’t been able to identify the “intrusion” associated with the theft by a third party in August 2013. The event was unearthed by forensic experts after law enforcement investigators warned the company about a potential breach.
The attacks on Yahoo’s system have sparked concerns from regulators and prompted lawsuits. In November, the company said it was cooperating with federal, state, and foreign governmental officials and agencies seeking information about the 2014 hack, including the U.S. Federal Trade Commission and the U.S. Securities and Exchange Commission. In December, following the admission of a second hack, a White House spokesman said the Federal Bureau of Investigation was probing the Yahoo hack as well.
Under the amended terms, the data breaches or losses won’t be taken into account in determining whether a “business material adverse effect” has occurred or whether certain closing conditions have been satisfied.
The $350 million discount was earlier reported by the Wall Street Journal. Bloomberg reported last week the two companies were close to an agreement on a reduced price.