Verizon To Acquire Yahoo's Operating Business For $4.8 Billion

After months of investor activism, speculation and rumors, Verizon Communications Inc. VZ confirmed Friday's reports that it will acquire some of Yahoo! Inc. YHOO's assets.

Shares of Yahoo were halted early Monday morning and resumed trading at 7:20 a.m. EDT. Shares were seen trading lower by 1.2 percent at $38.90.

Verizon said in a press release it has reached an agreement to acquire Yahoo's operating business for approximately $4.83 billion in cash.

Verizon stated in its press release that the addition of Yahoo to its AOL property (which it separately acquired in 2015) will create "one of the largest portfolios" of owned and partnered global brands with "extensive" distribution capabilities. Between Yahoo and AOL, Verizon will now own more than 25 brands in its online portfolio, including Yahoo's market-leading premium content brands in finance, news, sports and e-mail.

The agreement doesn't include Yahoo's cash on hand, nor its ownership stake in Alibaba Group Holding Ltd BABA, Yahoo Japan, certain minority investments in other firms.

Yahoo's non-core patents will continue being held and operated by Yahoo and will become a publicly traded investment company under a different brand name.

Yahoo said it will return "substantially all" of its net cash to shareholders and will provide additional information in the future.

Executive Commentary

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."

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."