Verizon Communications and Yahoo announced Tuesday (Feb. 21) revised deal terms in which Verizon will pay $350 million less for Yahoo and the two will share in any future liabilities from its two massive data hacks. The deal is now valued at $4.83 billion, lower than the $4.8 billion it originally paid.
In a press release, the companies said that under the amended terms, Yahoo will be responsible for half of any cash liabilities that arise from the hacks after the deal closes for non-Securities and Exchange Commission (SEC) investigations and third-party litigations. Liabilities from the SEC and shareholder lawsuits will be the full responsibility of Yahoo. Also the two sides agreed the data breaches and/or losses that result from them can’t be taken into account when determining whether a “business material adverse effect” has happened and whether certain closing conditions have been met.
“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,” said Marni Walden, executive vice president and president of Product Innovation and New Businesses at Verizon, said in a press release announcing the new deal terms. “The amended terms of the agreement provide a fair and favorable outcome for shareholders. It provides protections for both sides and delivers a clear path to close the transaction in the second quarter.”
In September, Yahoo disclosed the first of two massive breaches, revealing that a “state-sponsored actor” stole information from as many as 500 million user accounts. Yahoo said the stolen information may have included names, email addresses, telephone numbers, dates of birth and hashed passwords. That breach happened in 2014. In December, Yahoo disclosed another larger breach of potentially 1 billion user accounts. In that case, the breach occurred in 2013. In late January, The Wall Street Journal reported the SEC launched an investigation into the timing of Yahoo’s disclosures of the breaches and whether Yahoo should have alerted investors sooner.