Verizon has agreed to buy Yahoo’s core internet operations for US$4.8 billion in cash.
“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,” said Verizon chairman and CEO Lowell McAdam.
Yahoo’s remaining investments are worth around US$41 billion, with the company to also keep a small portfolio of patents.
US mobile operator Verizon will combine Yahoo’s operations with AOL, which it acquired last year. Overall, the combined business will have reach one billion mobile media technology users.
Marni Walden, executive VP and president of Verizon’s product Innovation and new businesses organisation, will oversee Yahoo’s integration into AOL.
Yahoo CEO Marissa Mayer (pictured), who joined the firm from Google in 2012, is not expected to move to Verizon as part of the deal.
“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,” she said. “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.”
The deal is subject to customary closing conditions, approval by Yahoo’s shareholders regulators. It is expected to close in the first quarter of 2017. Until then, Yahoo will continue to operate independently.
The news follows reports last month that claimed Verizon planned to submit a US$3 billion second-round bid for Yahoo’s core web assets.