Verizon To Buy Yahoo's Operating Business For About $4.83 Bln In Cash

(RTTNews) - Verizon Communications Inc. (VZ) said Monday that it agreed to acquire Yahoo! Inc.'s (YHOO) operating business for about $4.83 billion in cash, subject to customary closing adjustments.

In the pre-market trade, YHOO is trading at $39.49, up $0.11 or 0.28%.

VZ is trading at $56.30, up $0.20 or 0.36 percent, in the pre-market trade.

Verizon noted that Yahoo will be integrated with AOL under Marni Walden, EVP and President of the Product Innovation and New Businesses organization at Verizon.

Lowell McAdam, Verizon Chairman and CEO, said, "Just over a year ago we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators and advertisers. The acquisition of Yahoo will put Verizon in a highly competitive position as a top global mobile media company, and help accelerate our revenue stream in digital advertising."

Marissa Mayer, CEO of Yahoo, said, "Yahoo is a company that has changed the world, and will continue to do so through this combination with Verizon and AOL. The sale of our operating business, which effectively separates our Asian asset equity stakes, is an important step in our plan to unlock shareholder value for Yahoo. This transaction also sets up a great opportunity for Yahoo to build further distribution and accelerate our work in mobile, video, native advertising and social."

The deal is subject to customary closing conditions, approval by Yahoo's shareholders, and regulatory approvals, and is expected to close in the first-quarter of 2017. Until the closing, Yahoo will continue to operate independently, offering and improving its own products and services for users, advertisers, developers and partners.

Verizon will generally issue cash-settled Verizon RSUs for Yahoo RSUs that are outstanding at the close.

The sale does not include Yahoo's cash, its shares in Alibaba Group Holdings, its shares in Yahoo Japan, Yahoo's convertible notes, certain minority investments, and Yahoo's non-core patents. These assets will continue to be held by Yahoo, which will change its name at closing and become a registered, publicly traded investment company. Yahoo will provide additional information about the investment company at a future date.

Yahoo intends to return substantially all of its net cash to shareholders and will determine and communicate a specific capital return strategy at an appropriate time.

Verizon will announce second-quarter 2016 results on July 26.