Troubled internet company Yahoo (NASDAQ:YHOO) has reached a deal with Verizon (NYSE:VZ) to buy its core internet business, after the deal was jeopardised by a series of hacks.
The US telecoms giant has now agreed to buy Yahoo for a lower price of $4.48 billion, $350 million lower than was originally agreed.
Verizon entered into a deal to buy Yahoo in July last year, but the takeover was called into question after Yahoo disclosed several data hacks in December. The new agreement is significantly below the original figure, and involves Yahoo and Verizon splitting the cost of lawsuits arising from the data breaches.
Yahoo will however continue to be responsible for liabilities from shareholder lawsuits and Securities and Exchange Commission investigations.
The new deal will combine Yahoo’s search, email and messenger programmes, alongside its advertising technology tools, with Verizon’s AOL unit. Verizon have been looking to expand outside the saturated mobile market, in which it holds a large market share.
The remaining Yahoo business, which includes a 15 percent stake in Chinese e-commerce company Alibaba and 35.5 percent stake in Yahoo Japan, will be renamed Altaba and be governed by the remaining directors. CEO Marissa Meyer will step down as the company separates.
The deal for the troubled internet company is well below the $44 billion offered by Microsoft in 2008, or the $125 billion it was worth at its peak.
Yahoo shares are trading largely flat, up 0.88 percent at 45.49. Verizon shares are trading up 0.69 percent at 49.54(1447GMT)