Verizon to Acquire AOL for $4.4 Billion
Hey AOL, your mailbox is full! Why you ask? Well, it’s because AOL just got a piece of mail that’s worth over $4 billion. That’s right. Telecom giant Verizon made a huge announcement on Tuesday saying that they will be buying AOL for $50 per share, or about $4.4 billion.
Verizon if you don’t already know is the largest mobile phone operator in the country, and has growing lines of business offering high-speed Internet, as well as business and streaming video service. AOL, on the other hand which acquired Time Warner for $165 billion in what is broadly regarded as a debacle and the high-water mark of the dotcom bubble, is now a shadow of its former self, managing a small collection of media and technology properties.
Verizon will be billing the deal as a way for the company to increase its video offerings. But, with all the competition surrounding Verizon, which is already a leading brand in distribution of mobile video through its national mobile phone network, they are making a push to become a headlining leader in over-the-top video.
So, why is Verizon really buying AOL? Well, in acquiring AOL, Verizon is buying a lot more than what meets the eye, which goes beyond websites that host streaming content. Besides AOL owning its video and online advertising technology, AOL owns widely popular properties like TechCrunch and The Huffington Post and a sprawling collection of international news websites with growing traffic. What a deal for Verizon!
The transaction will be completed this summer and will take form of a tender offer followed by a merger, after which AOL will become a wholly owned subsidiary of Verizon.
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