US based telecommunication giant Verizon Communications Inc has announced the acquisition of AOL Inc for USD 50 per share, an estimated total value of approximately USD 4.4 billion.
AOL, short form of America Online, owns portfolio of global premium content brands such as The Huffington Post, TechCrunch, Engadget, MAKERS and AOL.com. The deal also includes acquisition of these websites.
AOL is a leader in the digital content and advertising platforms space. Verizon is a leader in mobile and OTT (over-the-top video) connected platforms. The combination of Verizon and AOL will create a unique and scaled mobile and OTT media platform for creators, consumers and advertisers.
This acquisition will take the form of a tender offer followed by a merger, with AOL becoming a wholly owned subsidiary of Verizon upon completion.
The transaction is subject to customary regulatory approvals and closing conditions and is expected to close this summer.
Verizon expects to fund the transaction from cash on hand and commercial paper.
Tim Armstrong, AOL chairman and CEO, will continue to lead AOL operations after closing.
Lowell McAdam, Verizon chairman and CEO, said: “Verizon’s vision is to provide customers with a premium digital experience based on a global multiscreen network platform. This acquisition supports our strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium customer experience.”
He added, “AOL has once again become a digital trailblazer, and we are excited at the prospect of charting a new course together in the digitally connected world. At Verizon, we’ve been strategically investing in emerging technology, including Verizon Digital Media Services and OTT, that taps into the market shift to digital content and advertising. AOL’s advertising model aligns with this approach, and the advertising platform provides a key tool for us to develop future revenue streams.”