Veizon

Verizon Communications will pay $350 million less than originally planned for Yahoo’s core business amid concerns that two massive security breaches had lowered the value of Yahoo’s email and other digital services.

The revised merger agreement announced by the two companies Tuesday brings the price of the deal down to $4.48 billion. The closing of the transaction had been delayed as Verizon and Yahoo assessed the fallout from the data breaches, which Yahoo disclosed last year.

The two have also agreed to share some legal and regulatory liabilities arising from the hacks.

“The amended terms of the agreement provide a fair and favorable outcome for shareholders,” Marni Walden, Verizon’s executive vice president and president of new business, said in a news release. “It provides protections for both sides and delivers a clear path to close the transaction in the second quarter.”

As The Associated Press reports, some investors had been concerned that Verizon would demand a discount of at least $1 billion or cancel the deal entirely. “Avoiding an even larger reduction in the deal value represents a small victory for Yahoo Chief Executive Marissa Mayer,” the AP said.

The lower sale price will cost Yahoo shareholders roughly 37 cents per share. “In the end, [Verizon] decided that the long-term benefits of picking up the Yahoo business, diminished as it has been over the years, would be more beneficial than dropping it altogether,” TechCrunch reported.

The potential benefits for Verizon include increasing sales of advertising and other services over its network as its legacy business of providing basic phone services faces stagnation and declining sales.

“Although Verizon today is a $126 billion business (2016 revenues), it has only 114.2 million retail connections,” TechCrunch said, noting that it is picking up Yahoo’s more than 1 billion users, and digital content, for “a relatively small fee.”

What’s left of Yahoo after the deal — a holding company to be called Altaba — will be solely responsible for liabilities stemming from shareholder lawsuits and a Securities and Exchange Commission investigation of Yahoo, with liabilities from other litigation and government investigations to be split 50/50 with Verizon.

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