Verizon Communications is disposing of its media businesses, which include Yahoo and AOL, for $5 billion.
In a statement, Verizon and Apollo Global Management announced that funds managed by affiliates of Apollo entered into an agreement to acquire Verizon Media for $5 billion.
Verizon will retain a 10% stake in the company, which will be known as Yahoo at close of the transaction and continue to be led by CEO Guru Gowrappan.
One of the world’s premier global technology and media companies, Verizon Media is comprised of iconic brands such as Yahoo and AOL, as well as ad tech and media platform businesses, says Verizon.
Brands like Yahoo and AOL have struggled to compete in the Internet market that is dominated by the likes of Google and Facebook.
Verizon notes the corporate carve-out will allow Verizon Media to aggressively pursue growth areas to benefit its employees, advertisers, publishing partners and nearly 900 million monthly active users worldwide.
“We are excited to be joining forces with Apollo,” says Gowrappan. “The past two quarters of double-digit growth have demonstrated our ability to transform our media ecosystem.
“With Apollo’s sector expertise and strategic insight, Yahoo will be well-positioned to capitalise 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.”
“We are thrilled to help unlock the tremendous potential of Yahoo and its unparalleled collection of brands,” says Reed Rayman, private equity partner at Apollo.
“We have enormous respect and admiration for the great work and progress the entire organisation has made over the last several years, and we look forward to working with Guru, his talented team, and our partners at Verizon to accelerate Yahoo’s growth in its next chapter.”
“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,” says David Sambur, senior partner and co-head of private equity at Apollo.
“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.”
“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,” says Hans Vestberg, CEO of Verizon.
“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.”
