Out-Law News 1 min. read
22 Feb 2017, 3:15 pm
The newly agreed price, of approximately $4.48 billion, has been set following negotiations between the companies over the terms of Verizon's takeover in light of two major data breach incidents Yahoo announced last year, which occurred in August 2013 and in late 2014.
According to their statement, the companies have agreed to "share certain legal and regulatory liabilities arising from" those incidents, as well as to a $350m price reduction. The takeover is now expected to be completed during the second quarter of 2017.
Marni Walden, Verizon executive vice president and president of product innovation and new businesses, said: "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 favourable outcome for shareholders. It provides protections for both sides and delivers a clear path to close the transaction in the second quarter."
Yahoo chief executive Marissa Mayer said: "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."
A reported $4.8 billion deal for Verizon to acquire Yahoo's operating business was agreed by the companies last year. The deal was previously expected to be completed within the first three months of 2017, but Yahoo notified a likely delay in closing the deal in a regulatory filing to the US Securities and Exchange Commission (SEC) earlier this year.
The Financial Times reported last month that the SEC had opened an investigation into Yahoo in relation to the data breach and would look into the time it took Yahoo to disclose the data breaches it experienced. The company's disclosures of the 2013 and 2014 breaches were made in September and December 2016, respectively.
Under the revised terms of the deal, Yahoo would have to pay any fine it could be issued by the SEC and would be responsible for any other liabilities stemming from "shareholder lawsuits". Yahoo will be responsible for 50% of any liabilities that stem from any other "government investigations and third-party litigation related to the breaches", the companies said.
The companies have also agreed that "the data breaches or losses arising from them will not be taken into account in determining whether a 'Business Material Adverse Effect' has occurred or whether certain closing conditions have been satisfied", they said.
