US telecom giant Verizon and Yahoo have announced that they have agreed to cut $350m (£280m) from the originally agreed price to acquire the internet company's core business following two massive cyberattacks. Under the new deal, Verizon said it will now buy Yahoo for $4.48bn (£3.6bn) and agreed to share the cost of legal and regulatory liabilities related to the breaches.
In July last year, Verizon signed a deal to acquire Yahoo for $4.85bn. However, the closing of the deal was delayed after Yahoo disclosed a massive data breach, which occurred in 2014 and compromised at least 500 million users' personal information, in September.
The company disclosed yet another breach in December saying the 2013 cyberattack, which Yahoo believes was carried out by a state-sponsored actor, affected more than one billion user accounts - the largest-known hack in history.
Many investors and experts raised concerns about the impact of the revealed data breaches on the ongoing takeover deal. In October, Verizon signalled that the disclosures had "material impact" and could affect the deal. Reports also emerged that Verizon was possibly looking for a discount or possible exit from the deal.
Marni Walden, the Verizon executive vice president who oversees product innovation and new businesses, said the telecom company has "always believed this acquisition makes strategic sense".
"We look forward to moving ahead expeditiously so that we can quickly welcome Yahoo's tremendous talent and assets into our expanding portfolio in the digital advertising space," Walden said in a statement. "The amended terms of the agreement provide a fair and favourable outcome for shareholders. It provides protections for both sides and delivers a clear path to close the transaction in the second quarter."
Yahoo chief executive Marissa Mayer said the transaction will "accelerate Yahoo's operating business especially on mobile, while effectively separating our Asian asset equity stakes."
Yahoo is also reportedly under investigation by the US Securities and Exchange Commission (SEC) over whether the company should have disclosed the data breaches earlier to investors.
Under the amended terms, Verizon has agreed to split the bill for any cash liabilities incurred following non-SEC government investigations and third party litigation related to the breaches. However, Yahoo will be solely responsible for any shareholder lawsuits and SEC investigations.
Verizon will combine Yahoo's search, email and messenger assets, in addition to its advertising technology tools, with its AOL unit that was purchased in 2015 for $4.4bn. Following the sale, the remaining company, which owns valuable stakes in Chinese e-commerce company Alibaba and Yahoo Japan, will operate as an investment firm that will be renamed Altbaba.
"It is an important step to unlock shareholder value for Yahoo, and we can now move forward with confidence and certainty," Mayer said.
The deal is now expected to close in the second quarter 2017.