US internet company Yahoo has maintained the sale of its core internet business to telecommunications company Verizon remains on track, despite the targeted completion of the deal having slipped.
Verizon in July sealed a $4.83bn (€4.5bn) deal to acquire the operating business of Yahoo. At the time a targeted completion of the first quarter of 2017 was outlined. However, in announcing its financial results for the quarter and full year ended December 31, 2016, Yahoo yesterday (Monday) conceded this will now not be possible.
The transaction has been delayed by the disclosure of two high-profile cyber breaches that exposed information from more than a billion Yahoo accounts. Yahoo said that it has spent around $10m related to a 2014 security breach announced in September and a 2013 incident announced in December.
Concerns had arisen over the Verizon agreement, but Yahoo said in a statement: “Yahoo has continued to work with Verizon on integration planning for the sale of its core business. In terms of timing, Yahoo had previously stated that it expected to close the transaction in Q1. However, given work required to meet closing conditions, the transaction is now expected to close in Q2 of 2017. The company is working expeditiously to close the transaction as soon as practicable in Q2.”
The addition of Yahoo to Verizon, which also acquired AOL in 2015, 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.
The sale does not include Yahoo’s cash, its shares in Chinese conglomerate Alibaba Group Holdings, its shares in Yahoo Japan, Yahoo’s convertible notes, certain minority investments, and Yahoo’s non-core patents – known as 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 has increased its activity in the sports sector considerably over the past year, striking partnerships with North America’s Major League Baseball and NHL ice hockey league, as well as golf’s PGA Tour.