NEW YORK, May 12, 2015 /PRNewswire/ -- Taking another
significant step in building digital and video platforms to drive
future growth, Verizon Communications Inc. (NYSE, Nasdaq: VZ) today
announced the signing of an agreement to purchase AOL Inc. (NYSE:
AOL) for $50 per share -- an
estimated total value of approximately $4.4
billion.
Verizon's acquisition further drives its LTE wireless video and
OTT (over-the-top video) strategy. The agreement will also support
and connect to Verizon's IoT (Internet of Things) platforms,
creating a growth platform from wireless to IoT for consumers and
businesses.
AOL is a leader in the digital content and advertising platforms
space, and the combination of Verizon and AOL creates a scaled,
mobile-first platform offering directly targeted at what eMarketer
estimates is a nearly $600 billion
global advertising industry. AOL's key assets include its
subscription business; its premium portfolio of global content
brands, including The Huffington Post, TechCrunch, Engadget, MAKERS
and AOL.com, as well as its millennial-focused OTT, Emmy-nominated
original video content; and its programmatic advertising
platforms.
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."
Tim Armstrong, AOL chairman and
CEO, will continue to lead AOL operations after closing.
Armstrong said, "Verizon is a leader in mobile and OTT connected
platforms, and the combination of Verizon and AOL creates a unique
and scaled mobile and OTT media platform for creators, consumers
and advertisers. The visions of Verizon and AOL are shared; 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."
The transaction 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. The company also continues to expect to return to
pre-Vodafone transaction credit ratings in the 2018-2019
timeframe.
Transaction advisers for Verizon were LionTree Advisors;
Guggenheim Partners; and Weil, Gotshal & Manges. AOL advisers
were Allen & Company LLC and Wachtell, Lipton, Rosen &
Katz.
Verizon Communications Inc. (NYSE, Nasdaq: VZ), headquartered in
New York, is a global leader in
delivering broadband and other wireless and wireline communications
services to consumer, business, government and wholesale customers.
Verizon Wireless operates America's most reliable wireless network,
with 108.6 million retail connections nationwide. Verizon also
provides converged communications, information and entertainment
services over America's most advanced fiber-optic network, and
delivers integrated business solutions to customers worldwide. A
Dow 30 company with more than $127
billion in 2014 revenues, Verizon employs a diverse
workforce of 176,200. For more information, visit
www.verizon.com/news/.
VERIZON'S ONLINE NEWS CENTER: Verizon news releases, executive
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Forward-Looking Statements
In this communication we have made forward-looking statements.
These statements are based on our estimates and assumptions and are
subject to risks and uncertainties. Forward-looking statements
include the information concerning our possible or assumed future
results of operations. Forward-looking statements also include
those preceded or followed by the words "anticipates," "believes,"
"estimates," "hopes" or similar expressions. For those statements,
we claim the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform
Act of 1995. The following important factors, along with those
discussed in our filings with the Securities and Exchange
Commission (the "SEC"), could affect future results and could cause
those results to differ materially from those expressed in the
forward-looking statements: adverse conditions in the U.S. and
international economies; the effects of competition in the markets
in which we operate; material changes in technology or technology
substitution; disruption of our key suppliers' provisioning of
products or services; changes in the regulatory environment in
which we operate, including any increase in restrictions on our
ability to operate our networks; breaches of network or information
technology security, natural disasters, terrorist attacks or acts
of war or significant litigation and any resulting financial impact
not covered by insurance; our high level of indebtedness; an
adverse change in the ratings afforded our debt securities by
nationally accredited ratings organizations or adverse conditions
in the credit markets affecting the cost, including interest rates,
and/or availability of further financing; material adverse changes
in labor matters, including labor negotiations, and any resulting
financial and/or operational impact; significant increases in
benefit plan costs or lower investment returns on plan assets;
changes in tax laws or treaties, or in their interpretation;
changes in accounting assumptions that regulatory agencies,
including the SEC, may require or that result from changes in the
accounting rules or their application, which could result in an
impact on earnings; and the inability to implement our business
strategies.
Additional Information and Where to Find It
The tender offer for the outstanding shares of AOL Inc. ("AOL")
has not yet commenced. This communication is for
informational purposes only and is neither an offer to purchase nor
a solicitation of an offer to sell shares of AOL, nor is it a
substitute for the tender offer materials that Verizon
Communications Inc. ("Verizon") and its acquisition subsidiary will
file with the U.S. Securities and Exchange Commission (the "SEC")
upon commencement of the tender offer. At the time the tender
offer is commenced, Verizon and its acquisition subsidiary will
file tender offer materials on Schedule TO, and AOL will file a
Solicitation/Recommendation Statement on Schedule 14D-9 with the
SEC with respect to the tender offer. The tender offer materials
(including an Offer to Purchase, a related Letter of Transmittal
and certain other tender offer documents) and the
Solicitation/Recommendation Statement will contain important
information. Holders of shares of AOL are urged to read these
documents when they become available because they will contain
important information that holders of AOL securities should
consider before making any decision regarding tendering their
securities. The Offer to Purchase, the related Letter of
Transmittal and certain other tender offer documents, as well as
the Solicitation/Recommendation Statement, will be made available
to all holders of shares of AOL at no expense to them. The
tender offer materials and the Solicitation/Recommendation
Statement will be made available for free at the SEC's website at
www.sec.gov. Additional copies may be obtained for free at
Verizon's website at www.verizon.com/about/investors or by
contacting Verizon Investor Relations, Verizon Communications Inc.,
One Verizon Way, Basking Ridge, NJ 07920.
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SOURCE Verizon Communications Inc.
