U.S. private equity group Apollo Global Management is near acquiring Verizon Communications’ AOL, Yahoo, as the telecom group shifts its emphasis to its core network businesses and 5G wireless technology rollout.
Sources with knowledge of the matter stated that the contemplated deal would value the brands together with Verizon’s advertising business at USD 4 billion to USD 5 billion.
It is worth noting that the transaction will mark a new chapter in the history of two of the internet's early pioneers. Yahoo was the front page of the internet, tracking the rapid proliferation of new websites in the late 1990s, while AOL was once the most popular way to access the internet.
Although agile start-ups such as Google and Facebook eventually surpassed the businesses, Yahoo and AOL continue to publish popular websites such as Yahoo Sports and TechCrunch.
Verizon referred to AOL as a digital trailblazer when it acquired the firm for USD 4.4 billion in 2015. Lowell McAdam, Chief Executive at Verizon at that time, supported the agreement as part of the company's strategy to provide a cross-screen connection for creators, clients, and advertisers to provide a premium experience.
Tim Armstrong, head of AOL, was included in the deal, and he soon convinced Verizon executives to expand the company's media holdings. He also engineered the USD 4.5 billion acquisition of Yahoo in 2017.
However, in 2018, Verizon incurred a USD 4.6 billion write-downs on its media companies given the increased competition and industry pressure that resulted in lower than anticipated sales and earnings, sources cited.
It is uncertain what Apollo intends to do with the business, however, it continues to generate significant revenue. In the first quarter, the media group brought in USD 1.9 billion in revenue, up 10% from the previous year.
The terms of the expected deal remain undisclosed.
Source Credit –
https://www.nytimes.com/2021/05/02/business/verizon-yahoo-aol-sale.html