UPDATED: Verizon is close to reaching an agreement with Yahoo to shave as much as $350 million off the $4.8 billion the telco previously agreed to pay for Yahoo’s internet businesses, according to reports.
Bloomberg reported Wednesday that Verizon was cutting the price by $250 million; the Wall Street Journal later reported that discount would be $300 million. Then Reuters cited a source saying Verizon was negotiating to reduce the acquisition by $250 million to $350 million.
The expected price cut comes after Yahoo issued two disclosures about massive user-data breaches last year — after Verizon had clinched the takeover deal. Verizon plans to combine Yahoo with its AOL division, hoping to gain greater audience and digital advertising scale between the two once-powerhouse internet properties.
Verizon declined to comment. In previous statements, the telco said it has been monitoring Yahoo’s ongoing investigation into the security breaches.
Also under the preliminary agreement, Verizon and Altaba Inc. — the name Yahoo will adopt following the sale of the web assets — will share “any ongoing legal responsibilities related to the breaches,” Bloomberg reported, which cited anonymous sources.
Last month, Yahoo said in announcing fourth-quarter 2016 results that it expects the Verizon deal to close in the second quarter of 2017 (after originally pegging it for Q1). The two hacks Yahoo disclosed had forced an additional review of the acquisition and delayed the closing. In September 2016, Yahoo announced that information on at least 500 million email accounts was stolen by “state-sponsored” hackers in 2014. That was believed to be the biggest-ever data breach on record until December — when the company disclosed that data from more than 1 billion user accounts was stolen by an unknown party in 2013.
Yahoo CEO Marissa Mayer, in the event the Verizon deal closes, is expected to join the telco at least for an interim transition period. AOL CEO Tim Armstrong will assume oversight of the combined AOL-Yahoo group. Armstrong said in an interview last month with Variety that Mayer is “in a mode where she wants to see them through to the next iteration. Then depending on what the next phase is, we’ll make a decision [about her future role].”
If and when the Verizon deal is completed, Mayer will resign from Altaba’s board along with six other members including former chairman Maynard Webb. Yahoo appointed ex-Broadcom CFO Eric Brandt chairman effective Jan. 9. The new Altaba Inc. will primarily be an investment-holding company whose major asset will be shares of China’s Alibaba Group.