Apollo Global Management is acquiring Verizon Media (previously Oath), which houses Yahoo and AOL, in a $5 billion deal. Verizon will retain a 10% stake in the company, which will be renamed Yahoo.
Verizon is taking a huge hit selling Yahoo and AOL, which were acquired for $4.48 billion and $4.4 billion, respectively.
Founded in 1990, New York-based Apollo Global Management is a private equity firm. CEO of Verizon Media, K. Guru Gowrappan, who joined the company in October 2018, will continue to lead Yahoo.
“We are excited to be joining forces with Apollo. The past two-quarters of double-digit growth have demonstrated our ability to transform our media ecosystem. This transition will help to accelerate our growth for the long- term success of the company,” said Gowrappan.
Verizon acquired AOL in 2015 and Yahoo in 2017, which were merged under a single company called Oath in June 2017. The experiment didn’t really take off for Verizon, and they renamed the company to Verizon Media in January 2019.
As a part of the agreement, Verizon will receive $4.25 billion in cash, preferred interests of $750 million and a 10% stake in Verizon Media, now Yahoo. The deal is expected to close in the second half of 2021.
“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,” said Hans Vestberg, CEO, Verizon.
Verizon also sold Tumblr to Automattic in 2019 in a deal valued to be less than $3 million. Tumblr was acquired by Yahoo in 2013 for $1.1 billion
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