Verizon might back out of its $4.8 billion Yahoo deal over data breach


Online pioneer Yahoo (NASDAQ: YHOO) has formally raised the possibility of Verizon Communications Inc. (NYSE, Nasdaq: VZ) backing out of the $4.8 billion acquisition deal, because of the massive email hack the company announced in September 2016.

In the “risk factors” disclosed on Wednesday, Yahoo listed several risks and uncertainties around the pending Verizon deal that could potentially make it fall through.

One of them stated:

…risks that Verizon may assert, or threaten to assert, rights or claims with respect to the Stock Purchase Agreement as a result of facts relating to the Security Incident and may seek to terminate the Stock Purchase Agreement or renegotiate the terms of the Sale transaction on that basis.

Risk factors are the worst-case scenarios companies are required to include in their quarterly and annual filings. So this doesn’t necessarily mean Yahoo sees Verizon undermining the deal due to the security breach as an immediate risk. Still, it’s interesting that Yahoo’s mentioned this possibility for the first time in public.

Although Yahoo CEO Marissa Mayer reassured that the Verizon deal was still on track in its October earnings release, Verizon’s lawyer Craig Silliman recently said the data breach could have “material” impact on the Verizon’s purchase of Yahoo.

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Verizon might back out of its $4.8 billion Yahoo deal over data breach

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