Verizon Revises Deal To Buy Yahoo At $350M Discount

Image courtesy of Ray J./Morton Fox

If you found out after you got engaged that your soon-to-be better half had done something that made you question the impending union, what would you do — Cancel the wedding? Move the reception from the country club to your cousin’s backyard? If you’re Verizon and your betrothed is the data-breached Yahoo, you ask for a $350 million discount.

Verizon and Yahoo announced an amended agreement today that lops $350 million off the $4.8 billion price they first agreed on.

This isn’t too much of a surprise, as reports swirled last week that Verizon was going to go ahead with the deal but at a $250 million discount.

In addition — as expected — the two companies “will share certain legal and regulatory liabilities arising from certain data breaches incurred by Yahoo.”

This means that Yahoo will be responsible for 50% of any cash liabilities that are incurred after the deal closes that are related to non-Securities and Exchange Commission government investigations and third-party litigation related to the breaches.

“Liabilities arising from shareholder lawsuits and SEC investigations will continue to be the responsibility of Yahoo,” the companies said.

But in a bright spot for Yahoo, the data breaches or losses arising from them “will not be taken into account in determining whether a ‘Business Material Adverse Effect’ has occurred or whether certain closing conditions have been satisfied.”

Plainly speaking, a material event could be anything that affects an organization’s strategic direction, mission, or business operation. Previously, Verizon had put the onus on Yahoo to prove that data breaches impacting more than 1.5 billion users total were not constitute material events. Now, it doesn’t matter.

Calling the amended terms of the agreement a “fair and favorable outcome for shareholders,” Marni Walden, Verizon executive vice president and president of Product Innovation and New Businesses, said it provides “protections for both sides.”

“We have always believed this acquisition makes strategic sense,” she said in a statement. “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.”