- Verizon will get $4.25 billion in cash along with its 10 per cent stake in the company.
- The conglomerate will be rebranded as Yahoo post the acquisition by Apollo.
- The companies expect to close the deal by the second half of this year.
Verizon has announced that it will sell its media group to Apollo Global Management for $5 billion. This will include digital media properties that were originally under AOL and Yahoo. Post the deal, Verizon will keep a 10 per cent stake in the company, which will be rebranded to just Yahoo.
Verizon had acquired AOL for $4.4 billion in 2015. It announced its plans to buy Yahoo for $4.83 billion in cash right next year, a deal that was ultimately completed in 2017. Since then, the company had been running Yahoo and AOL as an online media division called Oath under former AOL CEO Tim Armstrong.
With Oath, Verizon wanted to dominate that online advertising space, taking on Google and Facebook in the process. The project, however, did not gain momentum and was ultimately rebranded as Verizon Media Group in November 2018. Selling the division to Apollo Global Management now reveals that Verizon is no longer interested in the business.
Under the deal, Apollo Global Management, a private equity firm, will acquire online media brands like TechCrunch, Yahoo Finance and Engadget. Verizon, in turn, will get $4.25 billion in cash along with its 10 per cent stake in the company. The companies expect to close the deal in the second half of 2021.
Guru Gowrappan, chief of Verizon Media Group, will continue to lead the now rebranded Yahoo under Apollo. CNBC reports that the media properties changing possession will now be challenged to grow and become profitable in the coming years. Apollo Global Management plans to attract yet another sale for the divisions or exit from the business altogether.
The sale comes as part of a series of strategic decisions made by Verizon recently. Within the last year, the company sold or shut down its media properties, including HuffPost, Tumblr and Yahoo Answers.
Verizon's intention to quit the space altogether and focus on its internet provider businesses, focusing on 5G networks, was hence clear for some time now. The recent deal that sees its media properties being sold at much lower valuations than they were acquired for seems to be the final nail in the coffin.