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Verizon buying AOL for US$4.4b
[NEW YORK] Verizon said on Tuesday it is buying AOL for about US$4.4 billion in a deal that will give the US telecoms giant increased digital content and advertising platform space.
Verizon said it is paying US$50 per share of AOL, whose stock price jumped by almost 18 per cent in pre-market trading to US$50.22.
"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," Lowell McAdam, Verizon chairman and CEO, said.
AOL's assets include a portfolio of well-known content providers such as The Huffington Post, TechCrunch and Engadget. It also has a subscription business and produces original video content.
Verizon said the deal, which it would fund from cash on hand and commercial paper, is subject to regulatory approvals and closing conditions and is expected to close this summer.
Tim Armstrong, AOL chairman and CEO, will continue to lead AOL operations after closing.
"The visions of Verizon and AOL are shared," Armstrong said in the statement.
"The companies have existing successful partnerships, and we are excited to work with the team at Verizon to create the next generation of media through mobile and video." Verizon shares were down 0.68 per cent at US$49.80 in premarket trading.