Verizon has signed an agreement to acquire AOL.
The telecoms giant will pay $50 per share in a deal worth approximately $4.4 billion.
Verizon will use the acquisition to support its LTE wireless video and OTT strategy, as well as its IoT platforms. AOL’s major assets include its subscription business, global content brands, original video content and programmatic advertising platforms.
Verizon will make a tender offer funded by cash on hand and commercial paper, which will be followed by a merger with AOL becoming a wholly owned subsidiary. This remains subject to regulatory approval and closing conditions.
Lowell McAdam, Verizon chairman and CEO, commented: "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’s chairman and CEO, will continue to lead AOL operations after the deal.
He 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."