Last September, mere months after Verizon agreed to acquire Yahoo for $4.83 billion, Yahoo announced that 500 million users’ accounts had been exposed in a data breach. In December, the ailing internet company said another 1 billion accounts had been compromised in a separate attack—the largest in US history. But rather than back out of the deal, telecom giant Verizon has used the fiasco as a bargaining chip.
The pair agreed to slash $350 million off the original price tag, the companies announced today. Verizon will now pay $4.48 billion in cash to buy the tech company and its suite of online assets, as part of the deal, which is expected to close in the second quarter of 2017.
The headache isn’t over for either business. Verizon and Yahoo, which will change its name to Altaba after its brand and operations are bought, will split the bill for future liabilities and costs that may arise from the data breaches, according to the revised deal. That would include the cost of governmental and third-party probes (The Federal Bureau of Investigation is currently investigating the matter.), legal actions, and other claims.
“We have always believed this acquisition makes strategic sense,” Marni Walden, a Verizon executive vice president and head of product innovation and new business, said in a statement. “The amended terms of the agreement provide… protections for both sides and delivers a clear path to close the transaction.”
Yahoo will bear sole responsibility for any shareholder lawsuits and Security and Exchange Commission (SEC) investigations. The SEC is reportedly looking into whether Yahoo should have notified investors about the breaches sooner. And a shareholder is reportedly suing (login required) the company for waiting two years to disclose the security failures, which occurred in 2013 and 2014.
As of last week, users were still being notified about intrusions into their accounts that may have taken place as late as 2016, which were uncovered as part of the investigation into the breach disclosed in December, Reuters reported. At the time, the price cut was valued between $250 and $350 million. Yahoo is now in the final stages of its security investigations, a person familiar with the matter told Quartz.