Verizon Has Just Sold its Stake in Yahoo and AOL for $5B

Reports surfaced this past weekend that had said Verizon may soon be selling its media business. Well, the news became true on Monday.

Wall Street learned this week that Verizon has offloaded its media business to Apollo Global Management for $5 billion. Apollo is also an investor in Shutterfly and Expedia Inc.

Verizon will get $4.25 billion in cash from private equity firm Apollo Global and preferred interests of $750 million and a 10% stake in the unit. This is unfortunately about half of what the company had paid for the businesses. The Verizon Media Group name will be changed to just Yahoo.

Guru Gowrappan, the head of Verizon’s media business, who will continue to lead the new Yahoo, was cheerful about the sale in a note to employees Monday morning and said, “This next evolution of Yahoo will be the most thrilling yet.” The memo was obtained by The New York Times.

Verizon has said the move allows it to “aggressively pursue growth areas and stands to benefit its employees, advertisers, publishing partners and nearly 900 million monthly active users worldwide.”

“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,” said Gowrappan in the release.

“We are thrilled to help unlock the tremendous potential of Yahoo and its unparalleled collection of brands,” said Reed Rayman, Private Equity Partner at Apollo. “We have enormous respect and admiration for the great work and progress that the entire organization 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,” said 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.”

The transaction is expected to close in the second half of 2021.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.