Verizon Communications announced plans to acquire Yahoo for $4.8 billion in cash, ending months of uncertainty after Marissa Mayer’s battered internet giant company said it would review strategic alternatives.Share prices of both companies initially moved slightly higher in premarket trading after the announcement, but they turned lower. By early afternoon, Yahoo was down 2.7 percent.
Brands in the new combined media entity, to be named Oath, could lay off a total of about 2,100 staffers, or about 15 percent of the workforce, the source familiar with the matter said. The cuts are expected to be announced next week once the deal closes.
“Oath’s strategy is to lead the global brand space. With access to over 1 [billion] consumers upon close, we will be positioned to drive one of the most important platforms in the consumer brand space. Consistent with what we have said since the deal was announced, we will be aligning our global organization to the strategy,” an AOL spokesperson said.
Marni Walden, Verizon president of product innovation and new businesses, said that the deal included Yahoo’s core operating business and patents.
The acquisition will help the telecom company in its efforts to build a media company, she said.
“Yahoo gives us scale and that’s what’s most critical here. We go from being in the millions of audience to the billions. We want to compete and that’s the place that we need to be, so we’re very pleased with where we are today,” Walden said.
The transaction is seen boosting Verizon’s AOL internet business, which the company acquired last year for $4.4 billion, by giving it access to Yahoo’s advertising technology tools, as well as other assets such as search, mail, messenger and real estate.
Verizon announced an agreement to acquire Yahoo in July, after a long bidding process. Now that it’s approved, Yahoo expects to close the deal on Tuesday, a move that will bulk up Verizon’s advertising efforts.
The shareholder vote — part of an annual meeting — wraps up an arduous sale process that was stymied by the revelations of two massive data breaches. The parts of Yahoo that were not bought by Verizon will become a company named Altaba.
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