Verizon Communications and online media company AOL have signed an agreement that, pending regulatory approvals, will see AOL become a wholly-owned subsidiary of the telecommunications giant.
The deal will see Verizon acquire AOL for US$50 per share, or approximately $4.4 billion.
Key assets of AOL include its subscription business, original video content that is carried via its AOL On Network, and global content brands such as The Huffington Post, TechCrunch, Engadget, MAKERS and AOL.com.
During the NewFronts in New York City earlier this month, AOL unveiled several new series, including Beyond the Horizon with Jared Leto, and also announced a content distribution and development deal with NBCUniversal.
“Verizon’s vision is to provide customers with a premium digital experience based on a global multiscreen network platform,” said Lowell McAdam, chairman and CEO of Verizon, in a statement. “This acquisition supports our strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium customer experience.
“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,” he added.
AOL chairman and CEO Tim Armstrong will continue to lead AOL following the closing of the deal, which will initially take the form of a tender offer followed by a merger. Verizon says it expects to fund the transaction from cash on hand and commercial paper.
“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,” said Armstrong via a statement.