Verizon to Buy AOL in $4.4 Billion Deal

Advertisement
By Reuters | Updated: 12 May 2015 18:28 IST
Verizon Communications Inc said it would buy AOL Inc in a $4.4 billion (roughly Rs. 28,256 crores) deal that gives the biggest U.S. wireless carrier access to AOL's successful digital advertising service and content including the Huffington Post news website.

The offer of $50 per share represents a premium of 17.4 percent to AOL's Monday close of $42.59.

AOL shares traded as high as $50.70 before the opening bell on Tuesday. Verizon shares were down about 1 percent at $49.32.

Advertisement

The deal, which includes about $300 million (roughly Rs. 1,926 crores) of AOL debt, will take the form of a tender offer followed by a merger, with AOL becoming a wholly owned subsidiary of Verizon.

Verizon said it expects to fund the transaction from cash on hand and debt.

Advertisement

Tim Armstrong, who has spearheaded AOL's transformation into one of the most successful advertising technology companies, will continue to lead the company after the sale.

"When you look at where we are today and where we are going, we have made AOL as big as it can possibly be in today's landscape," Armstrong told CNBC.

Advertisement

"..There is no better partner for us to go forward with than Verizon," he said.

Activist-investor Starboard Value LP had urged Yahoo Inc to consider a merger with AOL, whose businesses include the TechCrunch blog.

Advertisement

AOL reported a 7.2 percent rise in first-quarter revenue to $625.1 million, boosted by demand for its real-time bidding platform that helps advertisers place video and display ads on other digital properties.

AOL was a technology behemoth in 2000 when it bought Time Warner for more than $160 billion. That deal became a disaster and AOL was spun off from Time Warner in 2009 and was listed on the New York Stock Exchange at a value of $3.4 billion.

Verizon has been spending aggressively to expand its business. In February it bought licenses worth $10.4 billion in a government sale of wireless airwaves for mobile data.

LionTree Advisors, Weil Gotshal & Manges and Guggenheim Partners advised Verizon.

AOL's advisers were Allen & Co LLC and Wachtell Lipton Rosen & Katz.

Up to Monday's close, AOL's shares had gained 12 percent and Verizon's 3.4 percent in the past 12 months.

© Thomson Reuters 2015

 

Get your daily dose of tech news, reviews, and insights, in under 80 characters on Gadgets 360 Turbo. Connect with fellow tech lovers on our Forum. Follow us on X, Facebook, WhatsApp, Threads and Google News for instant updates. Catch all the action on our YouTube channel.

Advertisement

Related Stories

Popular Mobile Brands
  1. Tecno Camon 50 Ultra 5G Sale Begins in India Today
  2. These OnePlus Smartphones Could Receive the ColorOS 17 Update in India
  3. Redmi Note 17 Pro Max Listed on NBTC Website Ahead of Imminent Launch
  4. OnePlus N6x Design, Colour Options Teased Ahead of India Launch
  1. Offline UPI Payments With NFC Support Could Launch in India Soon
  2. Samsung Galaxy S26 Ultra's Privacy Display Feature Gets a Major Upgrade in One UI 9 Beta
  3. OnePlus N6x Design, Colour Options Teased in New Marketing Material Ahead of Imminent Launch in India
  4. OnePlus 11, Nord 4, and Newer Models Tipped to Receive the Android 17-Based ColorOS 17 Update in India
  5. Redmi Note 17 Pro Max Appears on Thailand's NBTC Certification Database, Might Launch Soon
  6. Apple’s First Foldable iPhone Reportedly Appears in iOS 27 Beta Code With a Multi-Battery Setup
  7. X for Android App Undergoes Major Design Overhaul, Enhanced Performance and Reliability
  8. Samsung Galaxy Buds Able to Reportedly Skip Galaxy Unpacked Launch; Could Debut in October
  9. Dell Alienware 16X Aurora, Alienware 16 Area-51 and Alienware 18 Area-51 Launched in India: Price, Specifications
  10. Samsung Galaxy A55, Galaxy A35 One UI 9 Test Builds Reportedly Spotted Ahead of Android 17 Rollout
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2026. All rights reserved.