BASKING RIDGE, N.J., and
SUNNYVALE, Calif., July 25, 2016 /PRNewswire/ -- Verizon
Communications Inc. (NYSE, Nasdaq: VZ) and Yahoo! Inc. (Nasdaq:
YHOO) today announce they have entered into a definitive agreement
under which Verizon will acquire Yahoo's operating business for
approximately $4.83 billion in cash,
subject to customary closing adjustments.
Yahoo informs, connects and entertains a global audience of more
than 1 billion monthly active users** -- including 600 million
monthly active mobile users*** through its search, communications
and digital content products. Yahoo also connects advertisers with
target audiences through a streamlined advertising technology stack
that combines the power of their data, content and technology.
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."
Yahoo will be integrated with AOL under Marni Walden, EVP and President of the Product
Innovation and New Businesses organization at Verizon.
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."
Mayer added, "Yahoo and AOL popularized the Internet, email,
search and real-time media. It's poetic to be joining forces with
AOL and Verizon as we enter our next chapter focused on achieving
scale on mobile. We have a terrific, loyal, experienced and quality
team, and I couldn't be prouder of our achievements to date,
including building our new lines of business to $1.6 billion in GAAP revenue in 2015. I'm excited
to extend our momentum through this transaction."
Tim Armstrong, CEO of AOL,
said: "Our mission at AOL is to build brands people love, and
we will continue to invest in and grow them. Yahoo has been a
long-time investor in premium content and created some of the most
beloved consumer brands in key categories like sports, news and
finance."
Under Armstrong, AOL has invested in and grown global premium
brands, including The Huffington Post, TechCrunch, Engadget, MAKERS
and AOL.com, and market-leading programmatic platforms -- including
ONE by AOL for both advertisers and publishers.
Armstrong added, "We have enormous respect for what Yahoo has
accomplished: this transaction is about unleashing Yahoo's full
potential, building upon our collective synergies, and
strengthening and accelerating that growth. Combining Verizon, AOL
and Yahoo will create a new powerful competitive rival in mobile
media, and an open, scaled alternative offering for advertisers and
publishers."
The addition of Yahoo to Verizon and AOL will create one of the
largest portfolios of owned and partnered global brands with
extensive distribution capabilities. Combined, AOL and Yahoo will
have more than 25 brands in its portfolio for continued investment
and growth. Yahoo's key assets include market-leading premium
content brands in major categories including finance, news and
sports, as well as one of the most popular email services globally
with approximately 225 million monthly active users****. Additional
technology assets in the advertising space include Brightroll, a
programmatic demand-side platform; Flurry, an independent mobile
apps analytics service; and Gemini, a native and search advertising
solution.
The deal is subject to customary closing conditions, approval by
Yahoo's shareholders, and regulatory approvals, and is expected to
close in Q1 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
(called the Excalibur portfolio). 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.
LionTree Advisors, LLC, Allen & Company LLC, Bank of America
Merrill Lynch and Guggenheim Securities, LLC are acting as
financial advisors to Verizon. Wachtell, Lipton, Rosen & Katz,
Gibson, Dunn & Crutcher LLP, Covington & Burling LLP and
Winston & Strawn LLP are acting as legal advisors to
Verizon.
Goldman, Sachs & Co., J.P. Morgan Securities LLC and PJT
Partners are acting as financial advisors to the Yahoo Board and
its Strategic Review Committee. Skadden, Arps, Slate, Meagher &
Flom LLP, Wilson Sonsini Goodrich
& Rosati and Weil Gotshal & Manges LLP are acting as legal
advisors to Yahoo. Cravath, Swaine & Moore LLP is independent
legal advisor to Yahoo's Strategic Review Committee.
Yahoo will hold an investor call at 5:30
a.m. Pacific/8:30 a.m. Eastern
today. Investors can dial in at (866) 593-9949 and investors
outside the U.S. can dial in at (973) 935-8154, using the
conference ID 55971720. The call will be hosted by Yahoo CEO
Marissa Mayer and Yahoo CFO
Ken Goldman. Yahoo will also make
the Chair of the Strategic Review Committee, Tom McInerney, and Yahoo Chairman of the Board
Maynard Webb available for questions.
Verizon will announce second-quarter 2016
results tomorrow, July 26. To provide further context for
investors about this transaction and other strategic initiatives,
McAdam will participate in Verizon's earnings webcast
beginning 8:30 a.m. Eastern tomorrow. Access instructions
and presentation materials, including Verizon's earnings release,
will be available at 7 a.m. on Verizon's Investor
Relations website, www.verizon.com/about/investors/.
*Based on Yahoo internal metrics, Jan. 2016 and AOL Internal, June 2016
**Yahoo internal user
metrics, Jan. 2016
***Yahoo
internal user metrics, Jan
2016
****Yahoo internal user metrics, Jan. 2016. Mail monthly active users
includes 58M IMAP/POP only users – ie. Yahoo monthly users that
access their mail using other companies mail application
About Verizon
Verizon Communications Inc. (NYSE,
Nasdaq: VZ), headquartered in New York
City, generated nearly $132
billion in 2015 revenues. Verizon operates America's most
reliable wireless network, with 112.6 million retail connections
nationwide. The company also provides communications and
entertainment services over America's most advanced fiber-optic
network, and delivers integrated business solutions to customers
worldwide.
About AOL
AOL is a media technology company with a
mission to connect consumers and creators through open
marketplaces. AOL uses data to disrupt content production,
distribution and monetization. The company connects publishers with
advertisers across its global, programmatic platforms, tapping into
Microsoft inventory and original content brands like TechCrunch,
The Huffington Post and MAKERS, which reach over 500 million
monthly global consumers. Within its mobile advertising network
alone, AOL has a reach of roughly 600 million users. A subsidiary
of Verizon, AOL is shaping the digital future.
About Yahoo
Yahoo is a guide to digital information
discovery, focused on informing, connecting, and entertaining users
through its search, communications, and digital content products.
By creating highly personalized experiences, Yahoo helps users
discover the information that matters most to them around the world
-- on mobile or desktop. Yahoo connects advertisers with target
audiences through a streamlined advertising technology stack that
combines the power of Yahoo's data, content, and technology. Yahoo
is headquartered in Sunnyvale,
California, and has offices located throughout the Americas,
Asia Pacific (APAC) and the
Europe, Middle East and Africa (EMEA) regions. For more information,
visit the pressroom (pressroom.yahoo.net) or the Company's blog
(yahoo.tumblr.com).
Yahoo!, the Yahoo family of marks, and the associated logos are
trademarks and/or registered trademarks of Yahoo! Inc. Other names
are trademarks and/or registered trademarks of their respective
owners.
Important Additional Information and Where to Find
It.
Yahoo will be filing with the Securities and Exchange Commission
(the "SEC") a proxy statement regarding the proposed sale of
Yahoo's operating business to Verizon Communications Inc., the
definitive version of which will be sent or provided to Yahoo
stockholders. BEFORE MAKING ANY VOTING DECISION, YAHOO'S
STOCKHOLDERS ARE STRONGLY ADVISED TO READ YAHOO'S PROXY STATEMENT
IN ITS ENTIRETY (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO)
WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS FILED WITH THE
SEC IN CONNECTION WITH THE PROPOSED TRANSACTION OR INCORPORATED BY
REFERENCE THEREIN BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTION. Investors and
stockholders will be able to obtain (when available) a free copy of
Yahoo's proxy statement, any amendments or supplements to the proxy
statement, and other documents filed by Yahoo with the SEC (when
available) in connection with the proposed transaction for no
charge at the SEC's website at www.sec.gov, on the Investor
Relations page of Yahoo's website investor.yahoo.net or by
writing to Investor Relations, Yahoo! Inc., 701 First Avenue,
Sunnyvale, CA 94089.
Yahoo and its directors and executive officers may be deemed
participants in the solicitation of proxies from its investors and
stockholders in connection with the proposed transaction.
Information concerning the ownership of Yahoo securities by Yahoo's
directors and executive officers is included in their SEC filings
on Forms 3, 4 and 5, and additional information is also available
in Yahoo's annual report on Form 10-K for the year ended
December 31, 2015, as amended, and
Yahoo's proxy statement for its 2016 annual meeting of stockholders
filed with the SEC on May 23, 2016.
Information regarding Yahoo's directors, executive officers and
other persons who may, under the rules of the SEC, be considered
participants in the solicitation of proxies in connection with the
proposed transaction, including their respective interests by
security holdings or otherwise, also will be set forth in the
definitive proxy statement relating to the proposed transaction
when it is filed with the SEC. These documents may be
obtained free of charge from the sources indicated above.
Verizon Forward-Looking Statements
In this
communication Verizon has made forward-looking statements. These
statements are based on our estimates and assumptions and are
subject to risks and uncertainties. Forward-looking statements
include the information concerning our possible or assumed future
results of operations. Forward-looking statements also include
those preceded or followed by the words "anticipates," "believes,"
"estimates," "hopes" or similar expressions. For those statements,
we claim the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform
Act of 1995. The following important factors, along with those
discussed in our filings with the Securities and Exchange
Commission (the "SEC"), could affect future results and could cause
those results to differ materially from those expressed in the
forward-looking statements: adverse conditions in the U.S. and
international economies; the effects of competition in the markets
in which we operate; material changes in technology or technology
substitution; disruption of our key suppliers' provisioning of
products or services; changes in the regulatory environment in
which we operate, including any increase in restrictions on our
ability to operate our networks; breaches of network or information
technology security, natural disasters, terrorist attacks or acts
of war or significant litigation and any resulting financial impact
not covered by insurance; our high level of indebtedness; an
adverse change in the ratings afforded our debt securities by
nationally accredited ratings organizations or adverse conditions
in the credit markets affecting the cost, including interest rates,
and/or availability of further financing; material adverse changes
in labor matters, including labor negotiations, and any resulting
financial and/or operational impact; significant increases in
benefit plan costs or lower investment returns on plan assets;
changes in tax laws or treaties, or in their interpretation;
changes in accounting assumptions that regulatory agencies,
including the SEC, may require or that result from changes in the
accounting rules or their application, which could result in an
impact on earnings; and the inability to implement our business
strategies.
Yahoo's Forward Looking Statements
This press
release (including, without limitation, the quotations from
management) contains forward-looking statements concerning the
proposed sale of Yahoo's operating business. Risks and
uncertainties may cause actual results to differ materially from
the results predicted. Potential risks and uncertainties include,
among others: (i) the inability to consummate the transaction in a
timely manner or at all, due to the inability to obtain or delays
in obtaining the stockholder approval, necessary regulatory
approvals for the transaction or satisfaction of other conditions
to the closing of the transaction; (ii) the occurrence of any
event, change or other circumstance that could give rise to the
termination of the purchase agreement; (iii) the potential adverse
effect on Yahoo's partner, advertiser, vendor and customer
relationships, operating results and business generally resulting
from the announcement of the transaction; (iv) the implementation
of the transaction which will require significant time, attention
and resources of Yahoo's senior management and others within Yahoo,
potentially diverting their attention from other aspects of Yahoo's
business; (v) risks related to Yahoo's ability to retain or recruit
key talent; (vi) the costs, fees, expenses and charges related to
or triggered by the transaction; (vii) potential adverse effects on
Yahoo's business, properties or operations caused by Yahoo
implementing the transaction; (viii) the anticipated benefits of
transaction to Yahoo's stockholders may not be realized; and (ix)
the initiation or outcome of any legal proceedings or regulatory
proceedings that may be instituted against Yahoo relating to the
transaction.
More information about other potential factors that could affect
Yahoo's business and financial results is included under the
captions "Risk Factors" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in Yahoo's Annual
Report on Form 10-K for the year ended December 31, 2015, as amended, and Quarterly
Report on Form 10-Q for the quarter ended March 31, 2016, which are on file with the SEC
and available on the SEC's website at www.sec.gov. All
information set forth in this communication is as of July 25, 2016. Yahoo does not intend, and
undertakes no duty, to update this information to reflect
subsequent events or circumstances.
MEDIA CONTACTS:
AOL
Caroline
Campbell
404-444-7970
c.campbell@teamaol.com
Verizon
Bob Varettoni
908-559-6388
robert.a.varettoni@verizon.com
Yahoo
Anne Espiritu
408-349-4040
media@yahoo-inc.com
IR CONTACTS:
Verizon
Mike
Stefanski
908-559-8018
michael.stefanski@verizon.com
Yahoo
Joon Huh
408-349-3382
investorrelations@yahoo-inc.com
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SOURCE Verizon