Following several data breaches and financial struggles, Verizon will cut $350 million off its original offer for the company’s pending acquisition of Yahoo’s internet assets.
The acquisition, which is expected to close in the second fiscal quarter of 2017, is now worth $4.48 billion (USD) according to a statement released about the events. The two companies will also share the legal culpability for the recent data breaches incurred by Yahoo.
Under the amended terms, Yahoo will reportedly be responsible for 50 percent of the cash liabilities incurred following the conclusion of both SEC (Securities and Exchange Commission) government investigations as well as third-party litigation in relation to the breaches.
Furthermore, shareholder lawsuits will also continue to be the responsibility of the newly branded Yahoo holding company, Altaba.
In a statement by Verizon, the company’s executive vice president and president of product innovation and new businesses, Marni Walden, reiterated Verizon’s eagerness to push ahead with the acquisition. “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,” she said.
The massive data breaches refer to two instances in the latter half of 2016 where it was revealed that over 1.5 billion accounts had been affected by data breaches.
These two instances occurred in September of 2016, when 500 million accounts were disclosed, and then again in December 2016, when 1 billion accounts were disclosed.
The two companies have agreed that to exempt the hacks from “business material adverse effects,” which might affect its closing. Verizon will also refrain from attempting to further lower the price because of the breaches.