It looks like Yahoo has conceded to take $350 million less than its previously announced $4.8 billion sale to Verizon over security lapses which might have exposed the personal information stored throughout over a billion Yahoo user accounts.
This revised agreement, announced on Tuesday, is aimed at easing investor concerns that Verizon Communications Inc could demand a discount in excess of $1 billion or cancel the deal all together.
Now, it is important to note that the hacking controversy—disclosed only after the two companies agreed on the initial sale—represents to the two largest security breaches in the history of the internet.
Under the newly-amended deal, Yahoo will have to cover at least 50 percent of any cash liabilities that would have accrued at closing, in relation to related government investigations and and breach-related lawsuits. Yahoo, on the other hand, will be responsible for liabilities that arose from shareholder lawsuits and SEC investigations.
“The amended terms of the agreement provide a fair and favorable outcome for shareholders,” explains Verizon executive vice president and president of product innovation and new business, Marni Walden. “It provides protections for both sides and delivers a clear path to close the transaction in the second quarter.”
Walden also goes on to say, “We have always believed this acquisition makes strategic sense. We look forward to moving ahead expeditiously so that we can quickly welcome Yahoo’s tremendous talent and assets into our expanding portfolio in the digital advertising space. 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.”
Yahoo maintains that its users continue to be loyal to the company, even in the face of mistrust that might have resulted from the lax security as well as any related delay in the discovery and disclosing of these hacks.
In addition, Yahoo CEO Marissa Mayer comments, “We continue to be very excited to join forces with Verizon and AOL. This transaction will accelerate Yahoo’s operating business especially on mobile, while effectively separating our Asian asset equity stakes. It is an important step to unlock shareholder value for Yahoo, and we can now move forward with confidence and certainty. We have a terrific, loyal, experienced team at Yahoo. I’m incredibly proud of our team’s strong product and financial execution in 2016, setting the stage for a successful integration.”