Verizon drops Yahoo takeover bid by $350m after massive cyber hacks
Verizon has lowered its offer for the purchase of search giant Yahoo by $350m (£282m) after the company was hit by two massive cyber-attacks in recent months.
Yahoo will now be bought by the American mobile network for a total of $4.48bn, after a delay in closing the deal which was first announced in July 2016.
It emerged in September 2016 that data from 500 million Yahoo users was stolen in 2014 in what was described as the largest hack of its kind to date.
However, in December of the same year, the company admitted that hackers had also stolen data from one billion Yahoo user accounts in 2013 in what was presumed was an attack funded by a nation state.
It is not thought that these attacks are connected.
Verizon’s purchase was subsequently delayed as the companies assessed the fallout from the data breaches. The leading US wireless carrier had been trying to persuade Yahoo to amend the terms of the agreement following the attacks.
The deal will combine Yahoo’s search, email and messenger assets, as well as advertising technology tools, with Verizon’s AOL unit.
Verizon has been looking to mobile video and advertising for new sources of revenue outside the over-saturated wireless market.
The companies said on Tuesday they expect the deal to close in the second quarter.
Verizon’s shares rose 0.6 per cent to $49.50 in early trading, while Yahoo’s shares were up 0.3 per cent at $45.25.
Under the amended terms, Yahoo and Verizon will split cash liabilities related to some government investigations and third-party litigation related to the breaches.
Yahoo, however, will continue to be responsible for liabilities from shareholder lawsuits and SEC investigations.
“The amended terms of the agreement provide a fair and favourable outcome for shareholders,” said Marni Walden, head of product innovation and new business at Verizon, in a prepared statement.