Verizon to sell its media unit to Apollo for £3.61 billion
- Apollo will pay £3.06 billion in cash & remaining in preferred interests.
- Verizon will keep a 10% stake in Verizon Media upon completion of the deal.
- Verizon shares were more than 0.5% up in premarket trading on Monday.
Verizon Communications Inc. (NYSE: VZ) said on Monday it will sell its media unit, including AOL and Yahoo, to Apollo Global Management (NYSE: APO) for £3.61 billion. The private equity company will call the business “Yahoo” upon completion of the transaction, which is expected this year in the second half.
Verizon shares were reported more than 0.5% up in premarket trading on Monday. The stock is now exchanging hands at £41.87 per share versus £42.44 per share at the start of the year. If you want to invest in the stock market online, you will need a reliable stockbroker – here is a comparison of the top few to make selection easier for you.
Verizon failed to grow its media units in recent years
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As per the agreement, Apollo will pay £3.06 billion to Verizon in cash and £540.81 million in preferred interests. The U.S. wireless carrier will still get to keep a 10% stake in Verizon Media, after the deal is closed.
In separate news from the United States, the largest U.S. chip-maker, Intel Corp’s CEO, said on Sunday that the company will focus less on buying back its stock.
Verizon failed to grow its media units in recent years. In 2018, it called its media properties nearly worthless as it booked a £3.32 billion write-down. The New York-based company offloaded Tumblr (blogging platform) in 2019 for an undisclosed amount. Then last year, it struck a deal with BuzzFeed to offload HuffPost (news website). Verizon was also in search of a potential buyer for Yahoo Finance but withdrew the plan later on.
Chief Executive Hans Vestberg’s remarks
CEO Hans Vestberg commented on the news on Monday and said:
“Verizon Media has done an incredible job turning the business around over the past two and a half years, and the growth potential is enormous. The next iteration requires full investment and the right resources. During the strategic review process, Apollo delivered the strongest vision and strategy for the next phase of Verizon Media. I have full confidence that Yahoo will take off in its new home.”
The news comes a week after Verizon reported market-beating results for its fiscal first quarter.
Verizon performed slightly downbeat in the stock market last year with an annual decline of roughly 3.5%. At the time of writing, it is valued at £172.52 billion and has a price to earnings ratio of 12.67.