Yahoo shareholders give thumbs up to Verizon's $4.48bn takeover

By:
James Pearce
Published on:

Deal set to close in next week, despite reports claiming Verizon will axe more than 2,000 jobs once it closes

Yahoo shareholders have approved Verizon’s takeover bid, as reports emerged claiming the US telco will slash around 2,100 jobs once the deal is closed.

Stockholders at Yahoo approved both the deal and an advisory vote over compensation that will be paid to executives for the deal, with the transaction now expected to close on 13 June 2017.

That deal included a discount of around $350 million, which was knocked off the Yahoo price after it became embroiled in multiple hacking scandals. The discount brings the price of the deal to around $4.48 billion.

The agreement was struck in July last year, but less than a month later it was revealed that Yahoo had been the victim of a major cyber-attack in 2014 that hit up to 500 million users. Months later, it revealed it had been the victim of another breach, reportedly one of the largest of all time, with data from up to one billion users compromised.

That led to doubts about the future of the deal, but ultimately Yahoo agreed to lower its fee. Once the deal is closed, it will see Yahoo and AOL, which is also owned by Verizon, merged into a single unit which I expected to be called “Oath”.

Verizon will be relieved now that the path appears clear after months of speculation and wrangling over the deal, but integration is reportedly set to throw up some integration issues.

It is not uncommon for mergers and acquisitions to lead to job cuts, of course, with duplication of roles common, especially when it is two (or in this case three) companies that used to compete against one another being combined.

According to American news outlet CNBC, 2100 roles are facing the chop. This is significantly more than the numbers touted in previous reports from Recode, which said 1,000 jobs will go. The Wall Street Journal and Reuters each cited unnamed sources, claiming 2000 jobs will be cut.

The job cuts will reportedly be announced once the deal is finalised, and will comprise of around 15% of the combined workforce, according to CNBC’s source.

On the new branding, an AOL spokesperson said: "Oath's strategy is to lead the global brand space. With access to over 1 [billion] consumers upon close, we will be positioned to drive one of the most important platforms in the consumer brand space. Consistent with what we have said since the deal was announced, we will be aligning our global organization to the strategy.”