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Media firms mega merger as Verizon buys Yahoo.

US telecoms firm Verizon has said it will a create mobile media giant after snapping up Yahoo for $4.83bn (PS3.7bn).

Verizon said the deal will create a combined company with one billion users and more than 25 brands which will be primed for "continued investment and growth".

The crux of the move will see Verizon merge Yahoo with AOL, which it bought last year for $4.4bn (PS3.4bn).

The deal will include Yahoo's email service and news, finance and sports websites, photo storage site Flickr and its advertising tools.

However, Yahoo's cash, its shares in Alibaba Group Holdings and Yahoo Japan, plus a portfolio of patents, will continue to be held by Yahoo, but it will change its name and begin trading as an investment company.

Lowell McAdam, Verizon's chairman and chief executive, said: "Just over a year ago we acquired AOL to enhance our strategy of providing a crossscreen connection for consumers, creators and advertisers.

"The acquisition of Yahoo will put Verizon in a highly competitive position as a top global mobile media company, and help accelerate our revenue stream in digital advertising."

Verizon said the takeover still needs the approval of Yahoo's shareholders and the green light from regulators.

It expects the deal to be complete in the first quarter of next year.

Marissa Mayer, chief executive of Yahoo, said: "Yahoo is a company that has changed the world, and will continue to do so through this combination with Verizon and AOL. The sale of our operating business, which effectively separates our Asian asset equity stakes, is an important step in our plan to unlock shareholder value for Yahoo. This transaction also sets up a great opportunity for Yahoo to build further distribution and accelerate our work in mobile, video, native advertising and social."

Yahoo has come under pressure from shareholders angry with a downturn in the company's performance as it lost out to the likes of Google and Facebook. Last year, Yahoo booked a $4.4bn (PS3.4bn) loss.

Tim Armstrong, chief executive of AOL, said the tie-up would help "unleash Yahoo's full potential". He added: "Combining Verizon, AOL and Yahoo will create a new powerful competitive rival in mobile media, and an open, scaled alternative offering for advertisers and publishers."

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Title Annotation:Business
Publication:Western Mail (Cardiff, Wales)
Date:Jul 26, 2016
Words:377
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