While Verizon is moving ahead with its plan to take over core parts of Yahoo’s business, the company has cut a new deal that lowers the price and has Yahoo shouldering more responsibility for any fallout from several large security breaches.
Expected to close in the second quarter of this year, the Verizon acquisition of Yahoo is now priced at $4.48 billion — $350 million less than when the purchase was first announced in July. The new terms also assign Yahoo with half the cash liabilities that might result from any investigations or lawsuits connected to the security breaches at Yahoo.
Two major hacks of Yahoo that took place in 2013 and 2014 came to light after Verizon announced its acquisition plans. A more recent cookie forging attack also appears to have affected more Yahoo users than initially believed.
Acquisition ‘Makes Strategic Sense’
“We have always believed this acquisition makes strategic sense,” Marni Walden, Verizon’s executive vice president and president of product innovation and new businesses, said in a statement today. “The amended terms of the agreement provide a fair and favorable outcome for shareholders. It provides protections for both sides and delivers a clear path to close the transaction in the second quarter.”
In addition to lowering Yahoo’s selling price, the new terms will also hold that company responsible for half of any cash liabilities that might arise after closing from any third-party lawsuits or government investigations outside of the Securities and Exchange Commission (SEC). Yahoo is already on the hook for any fallout from shareholder lawsuits or SEC investigations.
Under the new terms announced today, Verizon will not consider the recently disclosed Yahoo breaches — or any potential losses stemming from those — as a “business material adverse effect.”
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