Verizon to incur $660m in costs from Yahoo deal

By on
Verizon to incur $660m in costs from Yahoo deal

But expects big long-term savings.

Verizon Communications is expecting to incur about US$500 million (A$660 million) in pre-tax expenses in the second quarter as a result of its $4.48 billion purchase of Yahoo's core business.

Verizon is combining Yahoo's internet assets with AOL, which it bought two years ago, to form a venture called Oath, led by AOL CEO Tim Armstrong. Oath's more than 50 brands include HuffPost, TechCrunch and Tumblr.

The expenses are related to severance payments, acquisition and integration costs, Verizon, the biggest US wireless operator, said in a regulatory filing.

Verizon plans to cut about 2000 jobs or 15 percent of the 14,000 employees at its Yahoo and AOL businesses.

The company also said it expected to save over US$1 billion in operating costs through 2020 as a result of the Yahoo deal, which closed on Tuesday.

The closing of the deal, announced in July, had been delayed as the companies assessed the fallout from two data breaches that Yahoo disclosed last year.

On Friday, the remainder of Yahoo not acquired by Verizon will be renamed Altaba, a holding company whose main assets will be a 15.5 percent stake in Alibaba and a 35.5 percent interest in Yahoo Japan.

Tags:

Most Read Articles

Log In

Username:
Password:
|  Forgot your password?