Verizon is moving forward with its deal to buy Yahoo, but at a lower price.
The two companies have agreed to cut the acquisition price by $350 million. This follows Yahoo’s disclosures in recent months of two massive security breaches that affected more than one billion users.
Verizon’s new price tag for buying Yahoo’s core Internet assets is $4.48 billion. The whole amount being in cash with no option for Verizon shares. The deal is expected to close in the second quarter of this year.
Verizon and Yahoo have also agreed to split the cost of any legal liabilities resulting from the security breaches.
Yahoo said in December that it had uncovered a massive cyber-attack, where data from more than 1 billion user accounts was compromised in August 2013, making it the largest breach in history.
This followed the company’s disclosure in September 2016 that at least 500 million accounts were affected in another breach in 2014.
Yahoo has already been hit with multiple lawsuits from customers claiming the company was negligent with the U.S. Senate also beginning a probe on Yahoo over the breach.
Verizon conducted brand studies and found that Yahoo’s reputation was holding up after the hacks. The company decided to proceed in part because it continued to believe that the deal made strategic sense and that existing users were loyal and engaged. Verizon agreed to buy Yahoo’s core Internet business in July with a goal to use Yahoo’s a billion users to build an online advertising powerhouse that rivals Google and Facebook.
The companies said that they expect the deal to close in the second quarter. However, the data breach may delay some integration of Yahoo with Verizon after the closing.
“We continue to be very excited to join forces with Verizon and AOL,” Marissa Mayer, Yahoo’s CEO, said in a statement. “It is an important step to unlocking shareholder value for Yahoo, and we can now move forward with confidence and certainty.”
The agreement should be a welcome relief to Yahoo investors who have been in doubt about the deal for months due to concerns that the breaches would lead to costly lawsuits and lost users.