In a joint statement on Tuesday US time, the two companies said, apart the price drop, would "share certain legal and regulatory liabilities arising from certain data breaches incurred by Yahoo!".
"We have always believed this acquisition makes strategic sense", Marni Walden, executive vice-president of Verizon, said in a statement. Verizon will pay US$350 million less than the original contract price, which places the new value of the deal at $4.48 billion.
What's let of Yahoo after the deal - a holding company to be called Altaba - will be exclusively responsible for liabilities stemming from shareholder lawsuits and a Securities and Exchange Commission investigation of Yahoo, with liabilities from other litigation and government investigations to be split 50/50 with Verizon. Yahoo will be fully responsible for any liabilities resulting from shareholder lawsuits and SEC investigations. The deal brings "Yahoo's tremendous talent and assets into our expanding portfolio in the digital advertising space", she said. (Nasdaq: YHOO) today announced that they have amended the existing terms of their agreement for the purchase of Yahoo's operating business. The companies announced the amended terms of the deal Tuesday.
The latest move between Yahoo and Verizon came on the back of disclosures in September and December last year about substantial data breaches in the earlier years. Given that Yahoo is now under SEC investigation for taking too long to notify shareholders of the data breaches, it seems like Verizon simply doesn't want any of that mud on its hands.
The deal does not give Verizon any part of Yahoo's stake in Chinese online retailer Alibaba.
Verizon expects the Yahoo acquisition to broaden its user base and business reach.
After the breaches, Wall Street had some concern over the ultimate consummation of the deal.
Yahoo's frankly bad track record with security just cost the company $350 million.
Yahoo warned investors in November there was "no assurance" Verizon would actually go through with the deal.
Verizon sees mobile video and advertising as new sources of revenue outside an overcrowded USA telecoms market.
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