Verizon is selling its content business which is made up of its AOL and Yahoo properties to Apollo Global Management in a $5 billion deal. Verizon acquired the two businesses for $9 billion in 2017 and will be taking a loss selling for around half of what it paid. The telco company will retain a 10 percent stake in the company.
The new company will be known as “Yahoo” and will continue to be under the leadership of Verizon Media CEO Guru Gowrappan.
“We are excited to be joining forces with Apollo,” Gowrappan said in a statement. “With Apollo’s sector expertise and strategic insight, Yahoo will be well positioned to capitalize on market opportunities, media and transaction experience and continue to grow our full stack digital advertising platform. This transition will help to accelerate our growth for the long-term success of the company.”
Verizon will receive $4.25 billion in cash under the terms of agreement and will get preferred interests worth $750 million in Apollo. The deal which is expected to be closed in the second half of 2021 will also see Verizon maintain a 10 percent stake in Verizon Media (AOL and Yahoo).
“We are big believers in the growth prospects of Yahoo and the macro tailwinds driving growth in digital media, advertising technology and consumer internet platforms,” David Sambur, senior partner and co-head of private equity at Apollo, said in a statement. “Apollo has a long track record of investing in technology and media companies and we look forward to drawing on that experience to help Yahoo continue to thrive.”