Telecom giant Verizon Communications said Tuesday that it has signed an agreement to acquire online company AOL for $50 per share, or an estimated total value of approximately $4.4 billion.
AOL's stock on Monday had closed at $42.59. The price-per-share set for the deal provides a 23 percent premium.
Verizon said the acquisition further drives its wireless video and 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," it said.
Said Verizon chairman and CEO Lowell McAdam: "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.”
AOL chairman and CEO Tim Armstrong will continue to lead AOL's operations after the deal closes.
"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," Armstrong said. "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 is subject to customary regulatory approvals and closing conditions and is expected to close this summer, the companies said.
Earlier in the year, McAdam said amid deal chatter that Verizon wasn't planning to acquire AOL. He also said at the time: "I don't see us as a content company."
This article was first published by The Hollywood Reporter.