Verizon said it will pay $4.48 billion to acquire Yahoo’s operating business, a reduction of $350 million off the original price, following a pair of big data breaches disclosed last year.
The deal is expected to close in the second quarter of this year, and Verizon said the breaches will not be considered as possible “Business Material Adverse Effects,” legal contingencies that can let the acquiring company back out of a deal.
Verizon has agreed to pay a portion of damages that could arise from the breaches. It will take half the cost of non-SEC government investigations and third-party lawsuits. Yahoo will cover the other half of these costs and deal with any liability coming from shareholder lawsuits or SEC investigations.
“The amended terms of the agreement provide a fair and favorable outcome for shareholders,” Marni Walden, Verizon executive vice president and president of product innovation and new businesses, said in a statement. “It provides protections for both sides and delivers a clear path to close the transaction in the second quarter.”
News of the first breach came in September, when Yahoo disclosed that at least 500 million user accounts were compromised in late 2014. That was followed by a second disclosure in December, when Yahoo said another attack, this one in 2013, affected more than 1 billion user accounts.
The breaches were enough to reduce the value of the deal but not enough to scuttle it entirely. Verizon still wants access to Yahoo’s global audience of more than 1 billion users, including more than 600 million mobile users, as a way to increase its mobile advertising presence.
The all-cash deal does not include Yahoo’s stake in Alibaba Group or other Asian investments. Yahoo will continue to hold those assets and operate as a publicly traded investment company, under the name Altbaba, after the all-cash acquisition by Verizon closes.